IBRA: Danamon needs Rp 28.3t to survive<\/p>\n
JAKARTA (JP): Auditing results by independent internationally-
\naccredited accountants on cash-strapped Bank Danamon show a very
\nbig difference to those presented by the bank's old management.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) said yesterday
\nthe new auditing of Bank Danamon found that the bank's total
\nassets were only Rp 9.3 trillion as of the end of March 1998,
\ncompared to Rp 25.5 trillion reported by the bank's management.<\/p>\n
IBRA deputy chairman Maulana Ibrahim said that the different
\nfigures on the bank's assets were due to an adjustment from the
\ndeterioration on the quality of its loans.<\/p>\n
\"The adjustment has resulted in the creation of a negative net
\nworth of Rp 27.9 trillion and a decline in its assets to Rp 9.3
\ntrillion from Rp 25.5 trillion,\" he said after an extraordinary
\nshareholders meeting here yesterday.<\/p>\n
The meeting also approved the appointment of Untung Purwito of
\nstate-owned Bank Rakyat Indonesia as its new president.<\/p>\n
The old management reported that the bank's performing loans
\ntotaled Rp 17.61 trillion, while IBRA's auditors downgraded them
\nto only Rp 3.86 trillion as most of the reported performing loans
\nturned out to be sour.<\/p>\n
The auditors reported that the bank's debts to Bank Indonesia
\n(BI), the central bank, totaled Rp 18.62 trillion as of March 31,
\ncompared to only Rp 7.3 trillion reported by the management.<\/p>\n
Danamon was among the six banks put under the management of
\nIBRA in April after it obtained liquidity support worth Rp 18.4
\ntrillion from BI, Maulana said.<\/p>\n
In that situation, IBRA would need at least Rp 28.3 trillion
\nto recapitalize Bank Danamon, including the payment of its debts
\nto the central bank and to meet the minimum capital requirement
\nof 4 percent by the end of this year.<\/p>\n
The money needed to recapitalize the bank would be much higher
\nas the bank had continued to absorb liquidity credits from BI
\nsince it was taken over by IBRA early April.<\/p>\n
Maulana reported yesterday BI's liquidity support to Bank
\nDanamon totaled Rp 25.2 trillion as of June 22.<\/p>\n
If IBRA could not get enough money to recapitalize Bank
\nDanamon, Maulana said other possible options would be merger and
\nacquisition or transferring the bank's problem assets to the IBRA
\nasset management unit or closure and liquidation.<\/p>\n
The asset management unit, which will start operations next
\nmonth, is a debt recovery agency for troubled assets under IBRA.<\/p>\n
\"IBRA does not have the right to decide the fate of the bank.
\nIt is the government which will decide it,\" Maulana said.<\/p>\n
He said that the new quasi-management assigned to manage Bank
\nDanamon since April had been successful in arresting deposit runs
\non the bank.<\/p>\n
\"Despite its crisis, Bank Danamon managed to lure new deposits
\nworth around Rp 1 trillion since early May,\" he said.<\/p>\n
Bank Danamon's new president, Untung Purwito, said that the
\nbank showed promising signs of recovery for the future.<\/p>\n
He said that the bank managed to survive because it had most
\nof the qualities a sound bank needs, such as exceptional human
\nresources, extensive networking and good technology.<\/p>\n
\"Bank Danamon has met all the requirements a sound bank
\nneeds,\" he said.<\/p>\n
He added Bank Danamon has an extensive network, credit card
\nfranchises and a diverse customer base.<\/p>\n
\"The only thing that it doesn't have is public confidence
\nwhich is a vital element in the banking business,\" he said.
\n(aly)<\/p>",
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