BII expects big jump in profit next year<\/p>\n
JAKARTA (JP): Publicly listed Bank Internasional Indonesia
\n(BII) said it expected net profit next year to hit Rp 600 billion
\n(US$63.15 million), up from an estimated Rp 250 billion this
\nyear.<\/p>\n
BII vice president Yap Tjay Soen said on Wednesday the
\nincrease was largely the result of Rp 1.79 trillion from
\ninterbank claim settlements with the Indonesian Bank
\nRestructuring Agency (IBRA).<\/p>\n
\"If we invest the proceeds (Rp 1.7 trillion) in, say, Bank
\nIndonesia Certificates (SBIs) with an interest rate of 13
\npercent, then we can expect a net income of about Rp 200 billion
\nfor the year,\" Yap Tjay Soen said during a public expose by the
\nbank.<\/p>\n
IBRA took over the repayment of interbank claims for banks
\nthat have been placed under its supervision.<\/p>\n
The agency has already paid BII some Rp 1.42 trillion for
\ninterbank claims from Bank Aken, Bank Dagang Negara Indonesia
\n(BDNI), Bank Papan Sejahtera and Bank PSP, Yap Tjay Soen said.<\/p>\n
According to him, IBRA will pay another Rp 1.17 trillion in
\ninterbank claims from Bank Umum Nasional (BUM) and Bank Bira.<\/p>\n
Under an agreement on the payment of the claims, IBRA is to
\npay 20 percent of the amount in cash and 80 percent in the form
\nof restructured loans.<\/p>\n
Yap Tjay Soen said BII had worked out a bilateral settlement
\nwith Bank Tiara for interbank claims amounting to Rp 140 billion.<\/p>\n
In total, BII will receive Rp 1.79 trillion in cash from its
\nsettlement of interbank claims, Yap Tjay Soen said.<\/p>\n
However, he declined to classify the receipts of BII's
\ninterbank claim settlements as extraordinary revenue in its 2001
\nproject cashflow.<\/p>\n
He said the bank would capitalize on interest income from the
\nreceipts, which the bank planned to invest in various things,
\nincluding SBIs.<\/p>\n
\"Only about Rp 100 billion of the interbank claims will count
\nas extraordinary income in the Rp 600 billion of next year's net
\nprofit,\" Yap Tjay Soen said.<\/p>\n
As of September 2000, BII had booked a net income of Rp 183
\nbillion, with net interest revenue of Rp 580 billion.<\/p>\n
However, its capital adequacy ratio (CAR) is only 6.75
\npercent, far lower than most other banks recapitalized by the
\ngovernment.<\/p>\n
CAR measures the ratio of a bank's capital against its risked
\nweighted assets. The government is requiring banks to have a
\nminimum CAR of 8 percent by the end of 2001.<\/p>\n
Yap Tjay Soen said he was confident the bank could reach this
\nminimum CAR level, because of the estimated earnings BII would
\ngenerate next year.<\/p>\n
He added that IBRA was negotiating with BII's main
\nshareholder, the Sinar Mas Group, to restructure the bank's
\nloans, valued at over $1 billion, to affiliated companies under
\nSinar Mas.<\/p>\n
BII violated lending limit regulations by channeling more than
\n10 percent of its total loan portfolio to affiliated companies.<\/p>\n
Yap Tjay Soen said if the negotiations succeeded, BII could
\nlower the percentage of its risked weighted assets, thus raising
\nits CAR level.<\/p>\n
According to him, companies under the Sinar Mas Group are
\nnegotiating directly with IBRA to pledge assets of more than $1
\nbillion to the agency.<\/p>\n
BII is 18 percent owned by the Sinar Mas Group, 57 percent by
\nIBRA and 25 percent by the public.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bii-expects-big-jump-in-profit-next-year-1447893297",
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