Bank Bali heeds clients' concerns<\/p>\n
JAKARTA (JP): Head of Bank Bali's new management team Douglas
\nK. Beckett acknowledged on Wednesday that the high profile
\nscandal at the bank was a \"source of concern\" to its customers.<\/p>\n
He declined to confirm whether there was a run on the bank.<\/p>\n
\"We realize that the allegations are a source of concern to
\nour customers. However, as the new Bank Bali remains a local
\nbank, all depositors' funds are guaranteed by the Indonesian
\ngovernment,\" Beckett told a news conference.<\/p>\n
Since the outbreak of the Bank Bali scandal late last month,
\nthe new management team has been aggressive in its image-
\nenhancing efforts in local media.<\/p>\n
It also has conducted mass mailings to its customers in a bid
\nto maintain their confidence.<\/p>\n
Judging from the interest rate offered by the bank on its time
\ndeposits, however, there seems to have been no massive withdrawal
\nof money from the bank.<\/p>\n
The bank offered a 13 percent interest rate for a one-month
\ntime deposit, compared to the 15 percent interest rate ceiling
\nset by the government, for the Aug. 16 to Aug. 22 period, in
\norder to be eligible for the government deposit guarantee scheme.<\/p>\n
Banking law expert Pradjoto revealed to the media in early
\nJune details of Bank Bali's payment of a Rp 546 billion
\n\"commission\". The news has continued to grab headlines in the
\nlocal mass media amid speculation that the money, allegedly
\ntransferred to several high-ranking officials and Golkar leaders,
\nwas used to help secure the election of President B.J. Habibie in
\nNovember.<\/p>\n
UK's Standard Chartered Bank, which promised the government in
\nApril that it would buy a 20 percent stake in Bank Bali,
\ndiscovered the transaction on July 20 after conducting a due
\ndiligence audit.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) nationalized
\nthe bank on July 23 after the Ramli family, the then owner,
\nfailed to come up with funds to finance 20 percent of the bank's
\nrecapitalization program by the July 22 deadline.<\/p>\n
IBRA signed an investment agreement with Standard Chartered on
\nJuly 26, in which the UK bank will buy a 20 percent stake in Bank
\nBali to help finance the recapitalization program.<\/p>\n
As part of the agreement, Standard Chartered was given the
\nchance to lead a new management team of the bank for three years.
\nBeckett is from Standard Chartered.<\/p>\n
He said that the Bank Bali scandal would not cause Standard
\nChartered to drop its plans to invest in the bank.<\/p>\n
\"Nothing that has occurred in recent days has in any way
\ndetracted from Standard Chartered's commitment to invest in and
\ndevelop the 'new' Bank Bali,\" Beckett said.<\/p>\n
Recapitalization of Bank Bali was estimated at Rp 4.3 trillion
\nas of June, compared to the initial estimate of Rp 2.4 trillion
\nbased on the due diligence audit made by international accounting
\nfirm KPMG in March.<\/p>\n
KPMG is still in the process of auditing Bank Bali to decide
\nthe final cost of the recapitalization program, which will boost
\nits capital adequacy ratio to the minimum 4 percent level from
\nthe current negative capital condition.<\/p>\n
Bank Bali will offer a rights issue in October to finance the
\nrecapitalization program. Standard Chartered will buy 20 percent
\nof Bank Bali's enlarged capital, while the government through
\nIBRA would become a standby purchaser of the remaining 80
\npercent.<\/p>\n
\"The rights issue is on track,\" Beckett said.<\/p>\n
\"Standard Chartered's commitment is already apparent, with 70
\nstaff members already working as part of, or with, the new
\nmanagement team.<\/p>\n
\"A recapitalized Bank Bali, with access to Standard
\nChartered's strength, will be well positioned to become a leading
\nbank in Indonesia.\"<\/p>\n
Beckett also said that Standard Chartered held a call option
\nin the investment agreement to purchase all the shares held by
\nIBRA over the next five years.<\/p>\n
\"Our ambition is to develop the leading bank in Indonesia,\"
\nBeckett said, citing Standard Chartered's 136 years in the
\ncountry, its strong worldwide sales and marketing network and
\nBank Bali's distribution network of over 280 branches. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-bali-heeds-clients-concerns-1447893297",
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"sponsor": "Okusi Associates",
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