DBS Bank Tabungan Negara: Buy; Rp1,860; TP Rp2,100; BBTN IJ

Looking for funding

BBTN has submitted Rp1.5-2tr bonds issuance plan for next year with tenure of 5-10 year to Government. In addition to that, BBTN will conduct MBS issuance of Rp1tr next year to manage mismatched risk. In addition, BBTN has proposed Government to put 60% funding of total lending disbursement in public housing construction projects. BBTN’s CEO, Mr. Iqbal Latanro, stated that the bank extends credit of Rp1.5-2tr per month, which continually reduce its capital position. Therefore, BBTN hopes that Government will reduce its 73% stake and approve rights issue plan to bring free float to 40% earlier than the original plan projected in 2014.