Banking
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.
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. 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.
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. 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 |
Banking
ECB stays put but warns about surge in infections

By Balazs Koranyi and Francesco Canepa
FRANKFURT (Reuters) – The European Central Bank warned on Thursday that a new surge in COVID-19 infections poses risks to the euro zone’s recovery and reaffirmed its pledge to keep borrowing costs low to help the economy through the pandemic.
Having extended stimulus well into next year with a massive support package in December, ECB policymakers kept policy unchanged on Thursday, keen to let governments take over the task of keeping the euro zone economy afloat until normal business activity can resume.
But they warned about a new rise in infections and the ensuing restrictions to economic activity, saying they were prepared to provide even more support to the economy if needed.
“The renewed surge in coronavirus (COVID-19) infections and the restrictive and prolonged containment measures imposed in many euro area countries are disrupting economic activity,” ECB President Christine Lagarde said in her opening statement.
Fresh lockdowns, a slow start to vaccinations across the 19 countries that use the euro, and the currency’s strength will increase headwinds for exporters, challenging the ECB’s forecasts of a robust recovery starting in the second quarter.
Lagarde saluted the start of vaccinations as “an important milestone” despite “some difficulty” and said the latest data was still in line with the ECB’s forecasts.
She conceded that the strong euro, which hit a 2-1/2 year high against the dollar earlier this month, was putting a dampener on inflation and reaffirmed that the ECB would continue to monitor the exchange rate.
The euro has dropped 1% on a trade-weighted basis since the start of the year, but is up nearly 7% over the last 12 months. Against the U.S. dollar, that number rises to over 10%.
MORE STIMULUS?
Opening the door for more stimulus if needed, Lagarde confirmed the ECB would continue buying bonds until “it judges that the coronavirus crisis phase is over”.
Lagarde also kept a closely watched reference to “downside” risks facing the euro zone economy, which has been a reliable indicator that the ECB saw policy easing as more likely than tightening.
But she signalled those risks were less acute, in part thanks to the recent Brexit deal.
“The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging,” Lagarde said. “But the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk.”
Lagarde conceded that the immediate future was challenging but argued that should not impact the longer term.
“Once the impact of the pandemic fades, a recovery in demand, supported by accommodative fiscal and monetary policies, will put upward pressure on inflation over the medium term,” Lagarde said.
Benign market indicators support Lagarde’s argument. Stocks are rising, interest rates are steady and government borrowing costs are trending lower, despite some political drama in Italy.
There is also around 1 trillion euros of untapped funds in the Pandemic Emergency Purchase Programme (PEPP) to back up her pledge to keep borrowing costs at record lows.
The ECB has indicated it may not even need it to use it all.
“If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full,” Lagarde said.
Recent economic history also favours the ECB. When most of the economy reopened last summer, activity rebounded more quickly than expected, indicating that firms were more resilient than had been feared.
Uncomfortably low inflation is set to remain a thorn in the ECB’s side for years to come, however, even if surging oil demand helps put upward pressure on prices in 2021.
With Thursday’s decision, the ECB’s benchmark deposit rate remained at minus 0.5% while the overall quota for bond purchases under PEPP was maintained at 1.85 trillion euros.
(Editing by Catherine Evans)
Banking
Bank of Japan lifts next year’s growth forecast, saves ammunition as virus risks linger

By Leika Kihara and Tetsushi Kajimoto
TOKYO (Reuters) – The Bank of Japan kept monetary policy steady on Thursday and upgraded its economic forecast for next fiscal year, but warned of escalating risks to the outlook as new coronavirus emergency measures threatened to derail a fragile recovery.
BOJ Governor Haruhiko Kuroda said the board also discussed the bank’s review of its policy tools due in March, though dropped few hints on what the outcome could be.
“Our review won’t focus just on addressing the side-effects of our policy. We need to make it more effective and agile,” Kuroda told a news conference.
As widely expected, the BOJ maintained its targets under yield curve control (YCC) at -0.1% for short-term interest rates and around 0% for 10-year bond yields.
In fresh quarterly projections, the BOJ upgraded next fiscal year’s growth forecast to a 3.9% expansion from a 3.6% gain seen three months ago based on hopes the government’s huge spending package will soften the blow from the pandemic.
But it offered a bleaker view on consumption, warning that services spending will remain under “strong downward pressure” due to fresh state of emergency measures taken this month.
“Japan’s economy is picking up as a trend,” the BOJ said in the report, offering a slightly more nuanced view than last month when it said growth was “picking up.”
While Kuroda reiterated the BOJ’s readiness to ramp up stimulus further, he voiced hope robust exports and expected roll-outs of vaccines will brighten prospects for a recovery.
“I don’t think the risk of Japan sliding back into deflation is high,” he said, signalling the BOJ has offered sufficient stimulus for now to ease the blow from COVID-19.
NO EXIT EYED
Many analysts had expected the BOJ to hold fire ahead of a policy review in March, which aims to make its tools sustainable as Japan braces for a prolonged battle with COVID-19.
Sources have told Reuters the BOJ will discuss ways to scale back its massive purchases of exchange-traded funds (ETF) and loosen its grip on YCC to breathe life back into markets numbed by years of heavy-handed intervention.
Kuroda said the BOJ may look at such options at the review, but stressed a decision will depend on the findings of its scrutiny into the effects and costs of YCC.
He also made clear any steps the BOJ would take will not lead to a withdrawal of stimulus.
“It’s too early to exit from our massive monetary easing programme at this point,” Kuroda said. “Western economies have been deploying monetary easing steps for a decade, and none of them are mulling an exit now.”
(Reporting by Leika Kihara and Tetsushi Kajimoto; additional reporting by Kaori Kaneko; Editing by Simon Cameron-Moore & Shri Navaratnam)
Banking
World Bank, IMF agree to hold April meetings online due to COVID-19 risks

WASHINGTON (Reuters) – The International Monetary Fund and the World Bank have agreed to hold their spring meetings, planned for April 5-11, online instead of in person due to continued concerns about the coronavirus pandemic, they said in joint statement.
The meetings usually bring some 10,000 government officials, journalists, business people and civil society representatives from across the world to a tightly-packed two-block area of Washington that houses their headquarters.
This will be the third of the institutions’ semiannual meetings to be held virtually due to the pandemic.
(Reporting by Andrea Shalal; Editing by Chris Rees