IMF wants timetable for sale of state banks<\/p>\n
JAKARTA (JP): The International Monetary Fund (IMF) has asked
\nthe government to prepare a timetable for the sale of state-owned
\nbanks, according to director general for financial institutions
\nDarmin Nasution.<\/p>\n
"They have reminded us to start preparing a timetable for the
\npublic offerings of state banks," Darmin told reporters, after a
\nmeeting with the IMF special mission on Saturday.<\/p>\n
A visiting IMF team has been in Jakarta since last week to
\nnegotiate fresh economic reform targets under the next Letter of
\nIntent (LoI) in a bid to revive the fund's US$5 billion bailout
\nloan to the country.<\/p>\n
"I don't know whether it (the timetable) will be part of the
\nLoI," Darmin said, adding that the draft of the new LoI was
\nexpected this week.<\/p>\n
The IMF demand, however, seems to be against the wish of
\nMinister of Finance Rizal Ramli, who insisted on Friday that the
\nfund should not interfere in the sale of government assets as
\nsuch a move would jeopardize their prices.<\/p>\n
"How we do it (asset sales), when we do it and what we sell
\nshould be left to the government of Indonesia," Rizal told
\nreporters.<\/p>\n
The only publicly listed state-owned bank so far is PT Bank
\nNegara Indonesia (BNI), which floated its shares at the Jakarta
\nStock Exchange (JSX) in 1996.<\/p>\n
BNI is 64.79 percent owned by the government, 14.3 percent by
\nforeign investors, and 20.91 percent by the investing public.<\/p>\n
Other state banks including Bank Mandiri, Bank Rakyat
\nIndonesia (BRI) and Bank Tabungan Negara (BTN) are still fully
\nowned by the government.<\/p>\n
In addition to state banks, the government has also
\nnationalized four large private banks following the devastating
\n1997 financial crisis and has taken majority ownership in seven
\nother major private banks after it recapitalized them. This group
\nof banks are under the ownership of the Indonesian Bank
\nRestructuring Agency (IBRA), a unit of the finance ministry.<\/p>\n
But the government has said that it intends to gradually
\ndivest ownership in banks under IBRA after the agency restructure
\nthe banks. The divestment program is expected to be completed in
\n2004.<\/p>\n
The government also plans to privatize state-owned companies,
\nincluding banks.<\/p>\n
The proceeds from the privatization and the sale of IBRA
\nassets would be used to finance the state budget deficit.<\/p>\n
"By the end, all this restructuring, the improvement of their
\norganization, management and branches, is meant to groom the
\nbanks for initial public offering (IPO)," Darmin said.<\/p>\n
But he added that the IMF had not pushed the government to
\nspeed up the divestment of the banks, neither had it demanded the
\nrelease of a larger government stake to the public.<\/p>\n
"They (the IMF) never told us how much we must sell," he said.<\/p>\n
Darmin said he also briefed the IMF team on the acquisition
\nplan of publicly listed PT Bank Internasional Indonesia (BII) by
\nBank Mandiri. BII is one of the banks under IBRA's ownership.<\/p>\n
"They warned the acquisition should not burden Bank Mandiri as
\nthe bank has yet to complete its merger process," he said.<\/p>\n
Bank Mandiri was founded in 1999 as a result of the merger
\nof four state banks.<\/p>\n
It has made the bank the country's largest bank in terms of
\nassets. But Bank Mandiri has since been struggling to consolidate
\nthe operation of its various branches.<\/p>\n
Banking analysts have warned that the acquisition of BII may
\nfurther complicate the bank's consolidation efforts.<\/p>\n
The announcement of the acquisition plan by the government
\nlast week came as Bank Mandiri is preparing for an IPO later this
\nyear.<\/p>\n
Darmin said the IMF have made no suggestion to the government
\nto drop the acquisition plan, though he could not say whether
\nthey had agreed to it.<\/p>\n
The government launched the acquisition plan as a way to save
\nthe ailing BII.<\/p>\n
During the meeting with the IMF, he went on, they also
\ndiscussed revisions made to the 2001 state budget.<\/p>\n
"The IMF just wanted to hear more about the revisions we made
\non the state budget," he said.<\/p>\n
According to Darmin, the IMF had expressed no objection to the
\nrevised budget. (bkm)<\/p>",
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