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Shelf Registration Bond II OCBC NISP Tranche II Year 2017

By administrator | May 31, 2017 | Finance.

Shelf Registration Bond II OCBC NISP Tranche II Year 2017

INDICATION BOND OFFERED STRUCTURE
Bond Name : Shelf Registration Bond II OCBC NISP Tranche II Year 2017
Bond Offered : IDR 2,000,000,000,000 (two trillion rupiah) in principal amount
Rating : idAAA (Triple A), stable outlook from PT Pemeringkat Efek Indonesia (“Pefindo”), and AAA (idn) from PT Fitch Ratings Indonesia

Maturity : first, Series A (370-days); second, Series B (2-years), and third, Series C (3-years).

Coupon Payment : Quarterly
Use of Proceeds : Working capital
Listing : PT Bursa Efek Indonesia (“IDX”)

Bond II OCBC NISP and Shareholders Composition

Shareholders Profile:
Since 2005, OCBC Overseas Investment Pte. Ltd. As a subsidiary of Oversea-Chinese Banking Corporation Limited (OCBC Bank) has become the controlling shareholders, with ownership as at end of 2015 of 85.1%. Moreover, OCBC Bank as the ultimate shareholder constantly provides strong support to Bank OCBC NISP.

OCBC Bank is the longest established Singapore bank, formed in 1932 through the amalgamation of three local banks, the oldest of which was founded in 1912. It is the second largest financial services group in Singapore by assets, with total assets of SGD401billion as of December 31, 2014. OCBC is listed on the SGX-ST, and is one of the largest listed companies in Singapore by market capitalization.

Its market capitalization was approximately SGD42billion as of December 31, 2014, based on the closing price of its ordinary shares. OCBC Bank is one of the world’s most highly-rated banks, with an Aa1 rating from Moody’s. Recognised for its financial strength and stability, OCBC Bank is consistently ranked among the world’s strongest and safest banks by leading market research firms and publications.

Bond II OCBC NISP and Business Segment

The Company’s strategy is focused on its business development, increasing market share, and profitability. The Company is fairly confident in achiving its target through implementation of the following strategies:

Focusing on increase revenue
Increasing on current accounts and saving accounts growth
Improving on cost to income ratio
Increasing on branch office networks productivity
Increasing on risk management improvement synergy
Improving on operational excellence in order to become a “bank of choice” for customers
Strengthening the OCBC NISP Bank corporate culture
Focusing on three lines of defense in risk management

Bond II OCBC NISP and Business Outlook

PT Bank OCBC NISP, Tbk operates in the commercial banks sector
Its lines of business are commercial bank, foreign exchange bank and sharia bank. The Bank’s product includes funding product (savings and deposits), bancassurance, investment product (money market mutual fund, fixed income funds, balanced funds and equity mutual funds), OCBC NISP Premier, credit card, sharia banking, consumer loan, micro loan, commercial product (such as overdraft loan, demand loan, fixed loan, term loan and investment loan), financing program, cash management project, trade finance, treasury products and electronic banking services.

As of December, 2016, the Bank had 46 branch offices, 249 sub-branch offices, 22 cash offices, 10 sub-branch sharia office, 12 payment point, and 763 automated teller machines (ATMs) throughout Indonesia.

Bond II OCBC NISP and Business Risk

Here are some of the business risks faced by the Company in operation:

1. Risk Related to Business Activities
a. Credit Risk
b. Liquidity Risk
c. Operational Risk
d. Market Risk
e. Legal Risk
f. Reputation Risk
g. Strategic Risk
h. Compliance Risk

2. Investment Risk For Bondholders
a. Liquidity Risk. The illiquid risk of bonds offered in the Public Offering is caused purpose of buying bonds as a long-term investment.
b. Default Risk. A risk resulting from the failure of the Company to make payments of interest and principal payable at a maturity time, or the failure of the Company to satisfy the other provisions stipulated in the contract bond is the impact of the deterioration of the performance and development of the Company’s business which resulted in the Company experiencing financial difficulties.

Bond II OCBC NISP and Company Performance

OCBC NISP Bank recorded net profit IDR1.78trn on 2016 and 19.3% YoY growth.
Net profit supported by net interest income that grows above operational expense over the same period. The company is able to book net interest income growth to 22%. Furthermore, net profit growth is also supported by the company’s ability to maintain reserved in 2016.

Throughout 2016, credit facilities of OCBC NISP Bank rose 7.4% or lower than third party funding. Lower credit facilities pushing loan to deposit ratio (LDR) of the company to around 89.9%. That level is still lower than Bank of Indonesia (BI) implementation which is 100%. Thus, it will support company to do more expansion.

The growth of net profit also affecting return on asset (ROA) and return on equity (ROE). Both ROA and ROE of OCBC NISP Bank equals 1.85% and 9.85% in 2016 respectively. Furthermore, capital adequacy ratio (CAR) is in the level of 18.3% in the same period. Assets and Equities are rising due to an expansion of OCBC NISP Bank in 2016. Total assets rose 14.7% or equal to IDR138.2trn. Equity rose 18.9% or equals to IDR19.51trn. Total company’s liabilities rose by 7.4% or equals to IDR90.24trn.

Bond II OCBC NISP and Third Pary Fund

In terms of funding, third party fund (DPK) which gathered by OCBC NISP Bank also rising. Company’s third party fund rose 18.7% to IDR103.6trn in 2016. Rising in third party fund supported by savings and term deposits which rose 19.4% and 22.7% respectively in the same period.

In 2016, OCBC NISP Bank booked net interest margin (NIM) by 4.6% which is higher compared to last year. The moderate rising is indicating the ability of the company to sustain its credit interest compare to last year. In addition, CASA portion of the company is 39.4% in 2016.

Finally, OCBC NISP Bank successfully maintains the quality of assets while doing diversification in giving credits. Non-performing loan (NPL) of the company is maintained at 1.9% from the total gross credit that worth IDR93.3trn in 2016. Last, it also reached 1.9% in 2010. OCBC NISP Bank policy regarding selective credit expansion is to maintain liquidity stability and quality of assets due to slowing down in tight liquidity economic.

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