MICROCAPITAL BRIEF: Bank Tabungan Pensiunan Nasional (BTPN) of Indonesia Borrows $300m from Sumitomo Mitsui Banking Corporation (SMBC), International Finance Corporation (IFC) for Microenterprise Lending

The International Finance Corporation, a member of the World Bank Group, and Sumitomo Mitsui Banking Corporation (SMBC), a Tokyo-based subsidiary of Sumitomo Mitsui Financial Group, recently provided a loan of USD 300 million to Bank Tabungan Pensiunan Nasional (BTPN), a commercial bank in Indonesia. USD 75 million of the loan was supplied by IFC, with the remainder disbursed by SMBC, which holds a 40-percent equity stake in BTPN. The loan is dedicated to expanding BTPN’s microfinance operations.

Jerry Ng, President Director of BTPN, was quoted as saying, “These past few years, BTPN has developed a very strong strategic partnership with IFC, which we believe has significantly supported BTPN in achieving its vision to be the best mass market bank, making a difference in the lives of millions… With SMBC playing a significant role in this cooperation, we see an even stronger collaboration that demonstrates a joint commitment to provide wider access to financing to benefit our country’s economic development” [1].

In 2014, BTPN reported a 3.58 percent return on assets, 18.40 percent return on equity, total assets of USD 5.5 billion and a microloan portfolio of USD 822 million, representing approximately 21 percent of the bank’s total loan portfolio.

By Jeff Pierce, Research Associate

About Bank Tabungan Pensiunan Nasional (BTPN)

Established in 1958 in Indonesia, Bank Tabungan Pensiunan Nasional (BTPN) was first established under the name Bank Pegawai Pensiunan Militer (BAPEMIL) to accept deposits and provide loans to its members, who consisted of pensioners, civil servants and military personnel. BTPN obtained its commercial banking license in 1993 and started serving micro- and small enterprises (MSEs) in 2008. In May 2013, Sumitomo Mitsui Banking Corporation (SMBC) purchased a 40-percent stake in BTPN for USD 1.5 billion. In 2014, BTPN reported a 3.58 percent return on assets, 18.40 percent return on equity, total assets of USD 5.5 billion and a microloan portfolio of USD 822 million, representing approximately 21 percent of the bank’s total loan portfolio. BTPN does not report to the US-based nonprofit Microfinance Information Exchange (MIX).

About International Finance Corporation (IFC)

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments and advisory and risk mitigation services to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. In June 2014, IFC reported net income of USD 1.4 billion, total assets of USD 84.1 billion, return on assets of 1.8 percent and total investment mobilization of USD 38.1 billion.

About Sumitomo Mitsui Banking Corporation (SMBC)

Headquartered in Tokyo, Japan, Sumitomo Mitsui Banking Corporation (SMBC) was established in 2001 upon the merger of Sakura Bank Limited and Sumitomo Bank Limited. The Sumitomo Mitsui Financial Group (SMFG) was established in 2002, when SMBC became a wholly-owned subsidiary of SMFG. In 2003, SMBC merged with Wakashio Bank Limited. In May 2013, SMBC purchased a 40-percent stake in Bank Tabungan Pensiunan Nasional (BTPN) for USD 1.5 billion. As of 2014, SMBC offers a range of corporate and investment banking services including lending, foreign exchange services, trade finance, structured finance, project finance, syndicated lending, cash management and securities services. As of March 31, 2014, SMBC had approximately 22,900 employees and a network of 439 domestic and 16 overseas branches. As of March 31, 2014, SMBC reported total assets of JPY 136 trillion (USD 1.3 trillion), deposits of JPY 84 trillion (USD 810 billion) and “loans and bills discounted” of JPY 63.4 trillion (USD 610 billion).

Sources and Additional Resources:

[1] Tempo.co News: “BTPN Secures 300mn USD Loan from IFC, SMBC,” http://en.tempo.co/read/news/2015/03/04/056646929/BTPN-Secures-300mn-USD-Loan-from-IFC-SMBC

MicroCapital Universe Profile: BTPN

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+Tabungan+Pensiunan+Nasional+%28BTPN%29

MicroCapital Universe Profile: IFC

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital Universe Profile: SMBC

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sumitomo+Mitsui+Banking+Corporation+%28SMBC%29

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