BPI placed under BI's special care<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
The central bank has placed Bank Persyarikatan Indonesia (BPI)
\nunder its special surveillance program -- a measure designed by
\nBank Indonesia to help prevent a bank's financial woes from
\nworsening.<\/p>\n
Anton Torihorang, BI's bank monitoring director, said on
\nMonday that the bank's financial condition was deteriorating
\nbadly, leaving the central bank with little choice but to step in
\nand adopt rescue measures.<\/p>\n
\"Yes, BPI has been put under our Special Surveillance Unit
\n(SSU),\" Anton said.<\/p>\n
Anton however refused to say when the central bank started
\nrunning the program on BPI, which is mainly owned by foundations
\nassociated with Muhammadiyah, the country's second largest Muslim
\norganization.<\/p>\n
Under the program, the central bank would suggest a number of
\nalternate solutions and actions to improve the bank's
\nperformance, notably its financial condition, including drawing
\nup plans to seek new investors.<\/p>\n
The program also allows Bank Indonesia to ask the bank's
\nshareholders to dismiss and replace its board of directors and
\ncommissioners.<\/p>\n
According to BPI's quarterly financial reports submitted to
\nthe central bank, the bank suffered a loss of Rp 78.4 billion as
\nof September, as compared to about Rp 10.1 billion posted in the
\nsame period last year.<\/p>\n
BPI's capital adequacy ratio (CAR), a comparison between a
\nbank's capital and its assets including high-risk loans, stood at
\n8.81 percent as of September, slightly above Bank Indonesia's
\nminimum requirement of 8 percent.<\/p>\n
On loans however, the reports showed that BPI's non-performing
\nloans (NPLs) reached a staggering 23.29 percent, or way above the
\nmaximum permitted 5 percent as set down by Bank Indonesia.<\/p>\n
A high percentage of NPLs has the potential to drag a bank's
\nCAR down, as the bank will have to set aside funds to cover
\nlosses.<\/p>\n
Miranda S. Goeltom, BI deputy senior governor, explained that
\nthe central bank has suggested some alternatives to the bank's
\nmanagement on how it could raise its capital, including finding
\nnew investors.<\/p>\n
The SSU program lasts for six months, but can be extended for
\nanother three months pending progress in its financial status.<\/p>\n
The central bank has the right to close down BPI should rescue
\nefforts fail.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bpi-placed-under-bis-special-care-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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