Management reshuffle at four banks<\/p>\n
JAKARTA (JP): The government reshuffled on Friday the
\nmanagement of four ailing state banks that are to be merged into
\nBank Mandiri by placing private bankers in all the top positions.<\/p>\n
Bank Mandiri's chief commissioner, Mar'ie Muhammad, said that
\nthe reshuffle marked the start of the consolidation process of
\nthe four banks, Bank Bumi Daya (BBD), Bank Ekspor Impor Indonesia
\n(Bank Exim), Bank Dagang Negara (BDN) and Bank Pembangunan
\nIndonesia (Bapindo).<\/p>\n
\"Bank Mandiri has decided to appoint only professional
\nmanagers and those who can work together to smooth the
\nconsolidation process,\" Mar'ie told journalists.<\/p>\n
Bank Bali director Agam Napitupulu was appointed president of
\nBapindo, Bank Bumiputra director Agus Martowardojo was named
\npresident of Bank Exim,<\/p>\n
Peter B. Stok, a former director at Bank Niaga, was appointed
\nto lead BBD, and Kodradi, a former Bank Exim president, was
\nchosen to chair BDN.<\/p>\n
Bank Mandiri president Robby Johan was appointed chief
\ncommissioner of three of the four banks: BBD, BDN and Bank Exim.<\/p>\n
The equivalent position for Bapindo was entrusted to Djunaedi
\nHadisumarto, a deputy chairman of the National Development
\nPlanning Board.<\/p>\n
The restructuring of the four state banks was seen by analysts
\nas another bold attempt on the part of the government to improve
\nthe country's flagging banking industry.<\/p>\n
Following the management reshuffle, Mar'ie said Bank Mandiri
\nwould pursue financial restructuring and operational
\nconsolidation strategies at the four banks before merging them
\ninto Bank Mandiri some time in the next two years.<\/p>\n
The government decided in early October to merge the four
\nailing state banks into Bank Mandiri, which is expected to become
\nthe locomotive to drive the country's economy out of its worst
\ncrisis in decades.<\/p>\n
Mar'ie said the merger process would start with the financial
\nconsolidation of Bapindo and Exim, which should be completed by
\nJune next year.<\/p>\n
\"Similar plans will be followed by the other two banks,\" he
\nsaid, referring to BBD and BDN.<\/p>\n
During the merger process, Mar'ie said, Bank Mandiri would act
\nas a holding company, overseeing the operations of the four banks
\nas subsidiaries.<\/p>\n
Mar'ie, dubbed Mr. Clean during his tenure as finance minister
\nfrom 1993 to 1998, explained that Bank Mandiri's main agenda in
\nthe short-term would be to restructure the credit portfolios of
\nthe four banks and confine their business expansion to financing
\ntrade and small and medium businesses.<\/p>\n
\"In the longer term, Bank Mandiri is expected to evolve into a
\nretail bank... This will be pursued gradually without abandoning
\nour corporate banking business.\"<\/p>\n
The new megabank will then focus on financing and supporting
\nsmall and medium enterprises, exporters, industrial services
\nproviders in addition to nurturing its corporate banking.<\/p>\n
Bank Mandiri president Robby Djohan, who was snatched from the
\ncountry's flag carrier Garuda Indonesia early last month, said
\nthe bank would need between Rp 4 trillion (US$533 million) and Rp
\n6 trillion in fresh funds to meet the 4 percent capital adequacy
\nratio (CAR) requirement set by the government.<\/p>\n
CAR is the ratio between equity capital and risk-weighted
\nassets.<\/p>\n
\"In order to meet the 4 percent CAR requirement, we will need
\nat least Rp 4 trillion... or it could be between Rp 4 trillion
\nand Rp 6 trillion,\" he said.<\/p>\n
The government has required all banks to meet the minimum 4
\npercent CAR requirement by the end of 1998.<\/p>\n
Robby, however, said that as a result of the management
\nrestructuring, there would be massive layoffs of up to 15,000
\nemployees.<\/p>\n
\"In order to be efficient, we will only need between 8,000 and
\n10,000 employees when Bank Mandiri is fully operational,\" he
\nsaid.<\/p>\n
The four state banks currently have a combined staff of about
\n25,000 people.<\/p>\n
But he stressed that the government would settle the layoffs
\nproblem with golden handshakes in a win-win manner.<\/p>\n
Robby, a former president of Bank Niaga, said Bank Mandiri's
\nprimary job in the short term would be to channel trade financing
\nand standby credit facilities to the country's exporters.<\/p>\n
\"For this matter, we cannot wait until Bank Mandiri starts
\nfully operating in the next two years... We hope we can provide
\nsuch trade financing facilities by the end of this month,\" he
\nsaid.<\/p>\n
\"This has become our main priority,\" he said, stressing the
\nimportance of the facilities to help boost exports, arguing that
\nexporters at present lacked the necessary liquidity to finance
\nthe imports of raw materials and to run their operations. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/management-reshuffle-at-four-banks-1447893297",
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