by DBS Securities
Bank Tabungan Negara announced its plan to sell Rp2 trillion bonds with 10-year maturity to improve its funding structure. BTN expects to complete the offering by the end of June 2011 and the underwriters are Bahana, CIMB and Danareksa. The company intends to use the proceeds to finance its credit expansion as it plans to expand its loan book by over 20% in FY11. Total loans at the end of 1Q11 stood at Rp53.4 trillion while loan to funding ratio was just below 90%. BBTN is an attractive mid-cap banking stock as the market leader in the subsidized mortgage business in Indonesia with over 90% share. BUY with Target Price : Rp 2,500.