Bank Mayapada Internasional plans to raise Rp 2 trillion ($150 million) from a right and bond issuance this year to boost its capital. (Antara Photo/Sigid Kurniawan)

Mayapada Prepares Rights, Bonds Issuance to Boost Capital Amid Rapid Loan Growth

BY :LONA OLAVIA

JANUARY 14, 2017

Jakarta. Bank Mayapada Internasional, a publicly traded midsize lender, plans to raise Rp 2 trillion ($150 million) from a rights and bond issuance this year to boost its capital.

The lender, which is controlled by Indonesian tycoon Tahir, plans to issue the new stocks and bonds in equal value in the second half of the year, at the latest.

"We will see the market conditions. The proceeds would increase our [capital adequacy ratio] to 15 percent from 14.5 percent today," said Rudy Mulyono, director of compliance at Mayapada.

Bank Indonesia regulations require local banks to maintain their capital at between 8 percent and 14 percent of their risk-weighted assets, depending on the lenders' risk profiles, assigned by the central bank. The requirement is in place to ensure that banks can fulfill their obligations to depositors, even after considerable lending losses.

This would be Mayapada's second time in less than 12 months to seek capital in the stock market amid rapid loan expansion.

The lender raised Rp 1 trillion from a rights issue in November.

Mayapada booked a 37 percent increase in loans last year, or four times faster than the domestic banking industry, which only grew at around 9 percent. The lender aims to increase its loan book by 20 percent this year to Rp 44 trillion from Rp 37 trillion last year, Rudy said.

Mayapada's nonperforming loans, or bad loans, stood at 1.69 percent of the total at the end of 2016, Rudy said. This is well below the national average of 3.1 percent.

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