BNI prepares convertible bonds worth Rp2 trillion

BNI prepares convertible bonds worth Rp2 trillion

Bank BNI (ANTARA PHOTO/Zarqoni Maksum)

Jakarta (ANTARA News) - State-owned bank Bank BNI will issue convertible bonds worth Rp2 trillion to strengthen capital and mitigate systemic impact in the case of an economic crisis.

BNI President Director, Achmad Baiquni, in a press conference in Jakarta on Wednesday said that the company will release convertible bonds in the second half of 2018.

"We check the time frame and decide whether the time is tailored according to market conditions," he stated.

BNI Finance Director, Rico Rizal Budidarmo, on the same occasion, noted that convertible bond will also be used in anticipation of BNI`s funding needs for infrastructure financing.

Budidarmo remarked that BNI will indeed be aggressive to channel infrastructure credits. In 2018, BNI targets an overall loan growth of 15-17 percent from loans of Rp441.3 trillion in 2017.

Based on provisions, banks facing systemic impact are required to issue convertible bonds. The BNI, as a bond issuer, collected assets of around Rp700 trillion by the end of 2017 and occupied the fourth position as the largest bank by asset in Indonesia.

The provisions of convertible bond are contained in the OJK (Financial Service Authority) Regulation (POJK) No 14 / POJK.03 / 2017, concerning action plan for systemic bank.

Under the POJK, the deadline for systemic banks to issue bonds that can be converted into capital is until the end of this year.

The obligation to own debt instruments with capital characteristics must be met within a period of 18 months from the date of the action plan received by the OJK.

With this convertible bond, it is expected to strengthen the resilience of the capital of a systemic bank. This is to anticipate crisis risk both from internal and external factors.