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Clean Bank

Realizing a Clean Bank, KB Bukopin Cuts Bad Loans by Transacting Sales of NPLs and Risky Loans worth USD 183 Million

Jakarta, 18 Juli 2022 PT Bank KB Bukopin Tbk (KBB) has actually begun to realize the goal of becoming a bank that is free from bad loans and becoming a clean bank. KB Bukopin on June 21, 2022, has made sales transactions of 180 Non-Performing Loans (NPL) and Loans at Risk (LAR) with an Original Principal Balance (OPB) of Rp 4.14 trillion with a selling value of Rp. 2.65 Trillion or equivalent to US$ 183.08 Million (exchange rate of 1US$ = Rp. 14,500). This transaction is worth 31.31% of KB Bukopin’s book value of equity as of December 31, 2021.

KB Bukopin Finance Director Seng Hyup Shin said that “In order to improve the performance of KB Bukopin, the implementation of the Transaction will reduce the level of Risk Weighted Assets (RWA) and at the same time reduce the level of NPL. Gross NPL and Net NPL will decrease from 10.66% and 4.91% in the position of December 2021 to 5.94% and 3.60% in the position of December 2022. So it is hoped that KB Bukopin can improve its ability to disburse new, higher quality loans.”

KB Bukopin will transfer ownership of the troubled asset portfolio to a Special Purpose Company (SPC) in Singapore. Furthermore, SPC forwarded bonds worth US$ 180 million as payment. KB Kookmin Bank will issue an unconditional and irrevocable Stand-by Letter of Credit (SBLC) of USS185 million and provide a Revolving Credit Facility (RCF) to SPC.

KB Bukopin is appointed as servicing agent or collection agent and is responsible for collection, enforcement, and so on on behalf of SPC, which will then generate the main source of cash flow for SPC. KB Bukopin has high confidence in IDMB United Pte Ltd (lUL) because the private bonds to be issued by IUL as a non-cash payment instrument will be guaranteed by SBLC issued by KB Kookmin Bank as the controlling shareholder in KB Bukopin.

“KB Bukopin will have a healthier and more viable financial structure with a better risk profile, so that in the future KB Bukopin can concentrate and allocate resources to develop competencies and accelerate business growth, as well as provide added value for all stakeholders,” concluded Shin.

This year, KB Bukopin is very focused on creating a bank that is free from bad loans to become a clean bank in 2023. KB Bukopin plans to strengthen the special asset management function so that in the future it is hoped that it will be able to handle non-performing loans quickly.

About KB Bukopin

PT Bank KB Bukopin Tbk is a company engaged in the banking sector. Bank Bukopin (now: KB Bukopin) was established on July 10, 1970 and is known as the Indonesian Cooperative Commercial Bank.

On February 23, 2021, after receiving an effective statement from the OJK, the Company announced a name change from PT Bank Bukopin Tbk to PT Bank KB Bukopin Tbk.

Carrying the tagline “Together, We Are Financial Stars”, KB Bukopin is determined to realize its vision of becoming a Top 10 bank in Indonesia.