Six private banks agree to merge soon<\/p>\n
JAKARTA (JP): Six private banks -- Bank Aspac, Bank Indotrade,
\nBank Lautan Berlian, Bank Patriot, Bank Tata and Bank Uppindo --
\nwill merge early next year to boost their performance.<\/p>\n
Chief commissioner of Bank Aspac Thomas Suyatno told the media
\nyesterday that the banks signed an initial agreement on the
\nmerger plan on April 3.<\/p>\n
The plan was submitted to the Ministry of Finance on April 29,
\nand \"now we are waiting for approval from the government\".<\/p>\n
Thomas stated the Minister of Finance would likely give his
\napproval after the banks had completed their due diligence in
\nOctober this year.<\/p>\n
Thomas said due diligence was now underway to assess the
\nquality of the banks' assets and liabilities.<\/p>\n
\"Hopefully the new bank will start operations on January 2
\nnext year.\"<\/p>\n
He said the new bank, to be named Bank Asia Pacific, would
\nhave a capital adequacy ratio of 7.9 percent.<\/p>\n
The capital adequacy ratio was higher than the 4 percent
\nrequired by Bank Indonesia, the central bank, by the end of this
\nyear, he noted.<\/p>\n
Total combined assets of the six banks as of June 30 were Rp
\n7.9 trillion and total equities were Rp 603 billion.<\/p>\n
Thomas explained that shareholders of the banks had yet to
\ninject fresh capital into the new bank to increase its capital
\nbase to about Rp 1 trillion.<\/p>\n
\"Shareholders of the bank will have to sell their own personal
\nassets and convert them into equity in the new bank.\"<\/p>\n
The new bank will have 91 branches across the country with 424
\nautomated teller machines (ATMs).<\/p>\n
He said all of the banks remained under the supervision of the
\nIndonesian Bank Restructuring Agency (IBRA) after they obtained
\nmassive liquidity support from Bank Indonesia earlier this year.<\/p>\n
He declined to mention the total liquidity support obtained by
\nsix banks.<\/p>\n
But Thomas, who is also an executive of the country's National
\nPrivate Bank Association (Perbanas), said the country's ailing
\nbanks had obtained a total Rp 140.44 trillion in liquidity
\nsupport from the central bank as of July 29 this year.<\/p>\n
\"So in fact the government, through IBRA, now controls 70
\npercent of the assets of the country's banks.\"<\/p>\n
He said the Minister of Finance had approved two options to
\nextricate the banks from their troubles. One was to convert the
\nliquidity support into government equity in the cash-strapped
\nbanks or convert the liquidity support into long-term
\nobligations.<\/p>\n
\"Basically the Minister of Finance has agreed to partially
\nconvert the liquidity support into equity or all the liquidity
\nsupport into equity.\"<\/p>\n
He stressed the country's private banks would still have
\nthe option to buy back their stake from the government after the
\nsituation improved.<\/p>\n
\"Minister of Finance Bambang Subianto has agreed to the two
\npossible solutions,\" he said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/six-private-banks-agree-to-merge-soon-1447893297",
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