Bank Permata’s ($BNLI) public expose (23Nov2016) by Marisa Wijayanto
· BNLI plans to lower its wholesale loans proportion in the future due to high NPL risk.
o Wholesale loans to total loans declined to 49% in 9M16 vs. 53% in 9M15
o BNLI expects its wholesale loans to grow by 5-7% YoY, while its retail loans to grow by 9-12% YoY in 2017
o BNLI will also rebalance the wholesale loan portfolio to smaller loan size and more SOE loans in order to reduce its NPL risk.
o 9M16 retail loans breakdown:
§ Credit card: 2% of total loans
§ Personal loan: 1% of total loans
§ Joint financing (auto loans with Astra): 10% of total loans vs. 7% of total loans in 9M15
§ Mortgage: 13% of total loans vs. 12% of total loans in 9M15
§ SME: 25% of total loans
o To support its mortgage growth, BNLI accelerates its mortgage approval process to 5 days.
· Mining loans (including mining supported sectors) contributed 7-8% of total loans in 9M16
o Related to recently increasing coal price, BNLI stated that it is still too early to indicate the potential recovery in the mining sector’s NPL. If the coal price keep rising for the next 3-6 months, then it may give good indication for the NPL recovery.
· Most of the loan restructuring is through giving grace period
· BNLI plans to spin-off its sharia business by 2023 (Sharia loans contributed 9% of BNLI’s total loans).
o BNLI’s sharia business will implement branchless banking in 2017
· Fee based income grew significantly by 21% YoY in 9M16, supported by bancassurance business (Astra Aviva Life) and wealth management business