BRI slashes bad loans worth over Rp 1 trillion<\/p>\n
JAKARTA (JP): The state-owned Bank Rakyat Indonesia (BRI) has
\nwritten off more than Rp 1 trillion (US$435 million) in bad loans
\nfrom its balance sheet, according to the bank's top official.<\/p>\n
BRI president Djokosantoso said yesterday that the writeoff of
\nthe bad loans was an important measure in improving the bank's
\nfinancial performance.<\/p>\n
\"The move is also part of the bank's preparations to go
\npublic, possibly in 1998,\" he told newsmen at a ceremony for the
\nsigning of a cooperation agreement between the bank and the
\nIslamic University of Indonesia.<\/p>\n
He said that the removal of the bad credits reduced the total
\nnumber of the bank's bad (totally unpaid) loans to 3 percent of
\nits total outstanding loans, from 6 percent previously.<\/p>\n
Djoko said that problem loans at the bank amount to 12.7
\npercent of its total current outstanding loans of Rp 22 trillion.<\/p>\n
BRI's announcement about the write-off of its bad loans was
\nthe first made by a state-owned bank. State banks have been
\nsuffering a flat growth in their lending for the last three years
\nowing to the impact of the high value of their bad loans.<\/p>\n
According to Bank Indonesia, non-performing loans dropped to
\n10.4 percent in December, last year, from 12.1 percent in the
\nsame month of 1994. The portion of the bad (totally unpaid) debts
\nalso dropped to 3.3 percent from 4 percent in the same period.<\/p>\n
Writing off loans is an accounting process whereby a loan
\ndetermined to be a worthless asset is removed from the books as
\nan earning asset and charged to the loan loss reserve.<\/p>\n
He said that BRI would continue to seek the repayment of the
\nloans despite their removal from the balance sheet.<\/p>\n
In 1995, BRI booked a 74 percent increase in its consolidated
\npre-tax profits to Rp 255.25 billion (US$111 million) from Rp
\n147.17 billion in the previous year.<\/p>\n
The bank's revenues from interest fees increased by 25 percent
\nto Rp 1.55 trillion last year from Rp 1.35 trillion the previous
\nyear.<\/p>\n
The bank's consolidated assets, which totaled Rp 25.9 trillion
\nas of 1994, rose by 10 percent to Rp 28.56 trillion last
\nDecember.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bri-slashes-bad-loans-worth-over-rp-1-trillion-1447893297",
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