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BTN “The Leader of Mortgage in Indonesia”

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BTN “The Leader of Mortgage in Indonesia”

Attracts More Interest of Foreign Investors

PT Bank Tabungan Negara (Persero )Tbk – (BTN) is a fully commercial bank focusing on housing finance, mortgage for a broader group of communities, consisting of subsidized housing loans for middle and lower income group, and commercial housing loans for middle and upper level segment. As the pioneer of mortgage, BTN is leading the market with 27% market share on total mortgages, and remains very strong particularly on subsidized mortgage with 97% market share.

bank1 - Global Banking | FinanceBTN was established as “Postspaarbank” under The Dutch Government in 1897 and changed its name to BTN on February 9, 1950. Along with the commencement of the housing development plan by the Government in 1974 BTN was assigned as the sole bank to finance residential housing loan, and disbursed its first mortgage on December 10, 1976. The Bank has marked its distinctive role in parallel with the Government’s policy to facilitate new housing development as an essential need of the communities, which continuously rises over the years.

The demand for new houses in Indonesia reached 800.000 units per year, however only 400.000 units could be fulfilled due to supply and financing facility constraint. Total backlog of housing demand as of 2009 was approximately 8.5 million units. In order to reduce this problem, the ministry of housing took an initiative by providing a new housing subsidy scheme to facilitate more affordable mortgage for low income group of people. BTN has signed memorandum of understanding with the ministry of housing to provide subsidized mortgages for eligible borrowers. In 2011, BTN is targeting to finance subsidized mortgages up to 120.000 units.

BTN as the tenth largest bank in Indonesia has been able to maintain the loan growth by an average 27% for the last 3 years, or far above the industry growth of 22%. “We will maintain our loan growth by 25%-30% for the next two years” said Iqbal Latanro, The President Director of BTN.
The Mortgage market is still widely open and promising, as currently Indonesia still has very low mortgage loan penetration rate. In term of percentage to GDP, mortgage loan in Indonesia is approximately 2.5% or the lowest compared to neighboring countries. Research from Central
Bank of Indonesia stated that 71.4% of house purchase is done through bank financing.

Despite focusing its business on the housing finance sector, BTN also provides a comprehensive series of banking services with ever increasing portfolios both consumer and commercial as well as Sharia banking such as deposits, remittances, and credit cards. BTN has a huge base of customers with 5.5 million of customers comprising of 2 million loan customers and 3.5 million deposit customers. For the benefit of customers, the bank also has started doing a priority banking service in 2010.Funding base of the bank is generated from deposit (current account, saving account and time deposit) and wholesale funding by issuing long term bonds. It is not surprising that BTN is known as the most active bank who regularly issue corporate bonds through the capital market.

bank2 - Global Banking | FinanceTo manage the risk, the bank has taken initiatives to diversify loan compositions and securitize mortgage portfolios. BTN is going to increase the portfolio of non housing loans to gain higher margins and balance the maturity profile of asset and liabilities. BTN pioneered the mortgage securitization by successfully closing the first residential mortgage securitization in Indonesia in
2009 and got AAA rating for the securities issued. Mortgage securitization was done on true sale basis which allowed the bank to take out the asset from balance sheet and release capital.

The Bank continues to launch and deliver competitive and high quality services through its increasing number of outlets. Currently, the bank has 497 conventional banking outlets, 21 Sharia banking outlets, about 700 ATMs, and links to over 17.000 ATMs network across the country.
Customer may also access the bank’s services particularly on deposit and loan installment through post office outlets. There are 2.600 post office outlets connected real time online to the bank. BTN is the only conventional based bank (non sharia) with a license from the central bank to use post office branches for the bank customers to deposit and withdraw from their saving account.

BTN used to be 100% owned by government of Republic of Indonesia before it went public and listed 30% of its shares on the Indonesia Stock Exchange on December 17, 2009. The initial stock price was IDR 800 and it has been increasing since and reached the top by IDR 2.050 in November 2010. The composition of foreign investors keep increasing over time, and recently 67% of floating shares owned by overseas investors.

For Further Information please visit

PT Bank Tabungan Negara (Persero) Tbk

Global Banking & Finance Review


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