Bank Tabungan Negara (Persero) Tbk’s rating affirmed at “idAA+”

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1. Press Release May 5 , 2021 PT Bank Tabungan Negara (Persero) Tbk Analysts: Danan Dito / Handhayu Kusumowinahyu Phone/Fax/E-mail: (62-21) 5096 8469 / 5096 8468 / danan.dito@pefindo.co.id / handhayu.kusumowinahyu@pefindo.co.id CREDIT PROFILE Corporate Rating Rated Issues Bonds XV/2011 Bonds XIV/2010 Shelf Registered Bond I Shelf Registered Bond II Shelf Registered Bond III Shelf Registered Bond IV FINANCIAL HIGHLIGHTS idAA+/Stable idAA+ idAA+ idAA+ idAA+ idAA+ idAA+ Rating Period May 3, 2021 – May 1, 2022 May 3, 2021 – June 28, 2021 for Bond XV/2011 Rating History MAY 2020 MAR 2020 MAR 2019 MAR 2018 MAR 2017 idAA+/Stable idAA+/Stable idAA+/Stable As of/for the year ended Mar-2021 Dec-2020 Dec-2019 Dec-2018 375,729.8 19,117.0 261,339.8 294,850.4 2,718.1 625.1 *3.1 87.7 *0.9 4.3 115.9 17.7 88.6 14,525 361,208.4 19,987.8 260,114.2 278,990.9 8,913.8 1,602.4 2.8 91.6 0.5 4.4 115.0 19.3 93.2 14,050 311,776.8 23,836.2 255,825.2 225,383.2 8,961.8 209.3 3.0 98.1 0.1 4.8 50.0 17.3 113.5 13,883 306,975.9 23,840.4 238,297.4 229,829.0 10,089.2 2,807.9 3.7 85.6 1.0 2.8 49.2 18.2 103.7 14,380 Total assets [IDR billion] Total equity [IDR billion] Total gross loans [IDR billion] Total customer deposits [IDR billion] Net interest revenue (NIR) [IDR billion] Net income (loss) [IDR billion] NIR/average earning assets [%] Operating expense/operating income [%] Return on Average Assets [%] NPL (3-5)/gross loans [%] Loan loss reserve/NPL (3-5) [%] Risk weighted CAR [%] Gross loans/total deposits [%] USD exchange rate [USD/IDR] Unaudited Audited Audited Audited Note: Deposit insurance (LPS) fee is classified as part of operating expenses. *Annualized The above ratios have been computed based on information from the company and published accounts. Where applicable, some items have been reclassified according to PEFINDO’s definitions. idAA+/Stable idAA+/Stable Bank Tabungan Negara (Persero) Tbk’s rating affirmed at “idAA+” PEFINDO has affirmed its “idAA+” ratings for PT Bank Tabungan Negara (Persero) Tbk (BBTN) and its outstanding bonds, including Bond XV/2011 of IDR1.3 trillion that is maturing on 28 June 2021. Its readiness to repay the maturing bond is supported by its liquid assets in the form of current accounts with Bank Indonesia and banks, and placements with banks, which at end of March 2021 amounted to IDR13.5 trillion. The outlook for the corporate rating is “stable”. An obligor rated idAA differs from the highest rated obligors only to a small degree, and has a very strong capacity to meet its long-term financial commitments relative to those of other Indonesian obligors. The Plus (+) sign indicates that the rating is relatively strong within the respective rating category. The rating reflects the very strong likelihood of support from the Indonesian government as the controlling shareholder, its very strong business position in the mortgage loan segment, and its very strong capitalization. The rating is constrained by its below average asset quality profile as burdened by the construction and commercial segments, as well as its moderate profitability. The rating may be raised if PEFINDO views there is a higher likelihood of support from the government, including material evidence of BBTN’s greater participation in the government’s housing programs. This should be accompanied by further improvements in its asset quality and profitability profile, as well as low-cost funding mix. Conversely, the rating may be lowered if there is a downward shift in terms of government support to BBTN, due to a declining role in the government’s programs. We are of the view that the Covid-19 pandemic has increased the overall banking industry’s risk profile by causing a substantial business downturn in almost all sectors, resulting in lower demand for loans and other banking services. In addition, a business slowdown has weakened borrowers’ repayment capabilities, putting pressure on asset quality, which subsequently increase pressure on banks’ profitability and liquidity indicators. We are of the view that impact of the COVID-19 pandemic on BBTN’s overall credit profile to remain manageable, supported by its more-than-adequate liquidity position, particularly to support the repayment of its maturing financial obligations. As the country’s main subsidized mortgage lender, BBTN plays a very important role to support the government’s mission to provide affordable housing, and we expect a very strong likelihood of support from the government when needed. Nevertheless, we acknowledge the Bank’s exposure to the construction and real estate sectors, which has been significantly affected by the pandemic. Some mortgage debtors, particularly the non-fixed income earners, have suffered from weakening disposable income in repaying their mortgage installments to BBTN, as reflected by higher than industry average percentage figures of restructured loans and non-performing loan ratios. PEFINDO will continue to be vigilant on the impact of the Covid-19 pandemic on BBTN’s performance and overall credit profile. BBTN is a state-owned bank focused on mortgage lending. It provides subsidized mortgage loans to support the government’s housing program for low-to-medium-income debtors. As of March 31, 2021, the government held 60% of its shares, with the remaining 40% owned by the public. http://www.pefindo.com May 2021
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