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Shelf Registration Subdebt II Bank Panin Tranche II Year 2017

By administrator | February 15, 2017 | Finance.
Subdebt II Bank Panin

Illustration: Subdebt II Bank Panin

Shelf Registration Subdebt II Bank Panin Tranche II Year 2017

BOND STRUCTURE
Bond Name : Shelf Registration Subdebt II Bank Panin Tranche II Year 2017
Issuance Size : IDR 500,000,000,000 (five hundred billion rupiah) in principal amount
Rating : idA+ (A Plus), by PT Pemeringkat Efek Indonesia (“Pefindo”)
Tenures : 7 years
Coupon Indication : 9.90% – 10.50%
Coupon Payment : Quarterly
Listing : PT Bursa Efek Indonesia (“IDX”)

COMPANY BACKGROUND
Bank Panin was founded on 17 August 1971, after a merger of three banks namely Bank Kemakmuran, Bank Industri Djaja Indonesia, and Bank Industri & Dagang Indonesia. As well as, Bank Panin has operations in 33 provinces with 566 branches spreading from Aceh to Papua. Furthermore, listed on the Jakarta Stock Exchange in 1982, Bank Panin was the first bank to trade in the Jakarta Stock Exchange. Moreover, currently Bank Panin is one of the top ten Indonesian banks by total assets.

Bank Panin enhances its cross selling with its subsidiaries and affiliated firms including products from PT Panin Dai-Ichi Life; Panin Sekuritas, Tbk; Clipan Finance, Tbk; Verena Multi Finance, Tbk; and Bank Panin Syariah, Tbk; expects it can provide value-added for clients and expand its client base.

Subdebt II Bank Panin and Business Segment

Business development strategy in 2016 will focus on efficiency improvement and internal consolidation. In fact, the business growth is set conservatively and carefully at a healthy level with accepted risk, but still taking into consideration its probability and internal liquidity. Consequently, with the aforementioned consideration, in 2016 credit and third party funds are conservatively targeted to grow between 8% – 10% YoY with an increase in total asset between 4% – 8%.

Loan disbursements are still carried out selectively and prudentially to prospective sectors and in accordance with the bank’s capability. As well as, the increase of third party funds is more directed on the continuation of composition improvement by increasing the low cost fund portion to continuously control the cost of funds and interest expense. Credit quality will be maintained and improved with NPL indicator lower than the threshold set by authority. Fee based income and all non interest operating income will be optimized to support profitability, including loan recovery from write off. The position of written off loan as of December 2015 still remained high at IDR3.19trillion.

Subdebt II Bank Panin and Business Risk

Here are some of the business risks face by the Company in operation:
1. Risk Related to Business Activities
a. Financing Risk
b. Funding Risk
c. Operational Risk
d. Competition Risk
e. Macroeconomic Risk
f. Monetary Policy Risk
g. Changes in Foreign Exchange Risk

2. Investment Risk For Bondholders
a. Liquidity Risk. The risk that the bond may be not liquid due to the type of bond as long term investment instrument.
b. Default Risk. A risk resulting from the failure of the company to make payments of interest and principal at a maturity time, or the failure of the Company to satisfy the other provisions stipulated in the bond contract bond as the impact of the company’s financial deterioration.

Subdebt II Bank Panin and Company Analysis

Bank Panin booked lending growth of IDR117.74trillion in 2015, up 5.18% from IDR111.94trillion booked a year earlier. Commercial loans still dominated the bank’s lending with a share of 43%, followed by corporate loans of 32% and retail loans of 25%. NPL rose to 2.44% from 2.01%.

Bank Panin managed its liquidity to be in line with the lending growth, as reflected in the loan to deposit ratio (LDR). Funding rose 1.75% to IDR128.32trillion from IDR126.11trillion. Subsequently LDR increased from 95.47% to 98.83%.

Bank Panin’s total assets in 2015 reached IDR183.12trillion, up 6.07% from IDR172.64trillion in the previous year. Equity rose 33.6% to IDR30.81trillion from IDR23.06trillion mainly from retained earnings and gain on revaluation of fixed assets amounting of IDR6.2trillion conducted in 2015. Meanwhile, net profits decreased of 39.55% to IDR1.57trillion in 2015 compared to IDR2.59trillion.

ROA and ROE 1.31% and 6.07% respectively, from 2.23% and 9.24% in 2014. CAR 20.13%, up from 17.30% in 2014.

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