ABN still eying Indonesia cautiously<\/p>\n
AMSTERDAM (Reuters): Dutch bank ABN AMRO said yesterday its
\nonly major concern in Asia was its exposure in Indonesia, but
\nthat it believed it had made sufficient provisions to cover any
\nlosses there.<\/p>\n
ABN AMRO said nine percent of its total risk weighted assets
\nof 460 billion gilders (US$224.6 billion) were in Asia and one
\npercent were in South Korea, Indonesia, Malaysia and Thailand.<\/p>\n
"These are the countries with the worst bouts of Asian flu,"
\nchief executive Jan Kalff told a results news conference.<\/p>\n
He also said that he was less concerned now about general
\nAsian turmoil than in January, although Indonesia was a worry.<\/p>\n
Kalff said the bank had little to fear from its lending in
\nSouth Korea, Thailand and Malaysia in which most of the money had
\nbeen lent to the government or banks, many with state guarantees.<\/p>\n
He said private sector risks were minimal. In South Korea, he
\nsaid ABN AMRO had restricted itself to the best businesses in the
\ncorporate sector.<\/p>\n
In Thailand, the private sector loans were mainly to large
\nmultinationals or local export finance companies. In Malaysia,
\nwhere ABN AMRO had lent to local companies these loans were
\nmainly denominated in ringgits.<\/p>\n
But the company had provided total extra provisioning for Asia
\nin 1997 of about 500 million guilders, reflecting larger exposure
\nto the private sector in Indonesia.<\/p>\n
"There is some reason to be concerned here," Kalff said.
\n"...in the corporate sector there is the figure of 1.7 billion
\nguilders outstanding."<\/p>\n
He said a large part of the bank's lending to Indonesia's
\nprivate sector was in U.S. dollars while the borrowing companies'
\nrevenue was in rupiahs.<\/p>\n
"Their debt in rupiahs has increased, so we have taken
\nprovision of about 500 million guilders, but we think that will
\nbe enough" Kalff said.<\/p>\n
He also said a lack of clear policy was hampering negotiations
\nin Indonesia and hoped that elections in March could help towards
\na solution.<\/p>",
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