Societe Generale bank still gloomy on RI's prospects<\/p>\n
PARIS (Dow Jones): French bank Societe Generale said yesterday
\nthat it fears the worst about Indonesia's political and economic
\nprospects, despite having made large provisions already to cover
\nits exposure to the country.<\/p>\n
\"We have every reason to fear the worst there,\" Jean-Pierre
\nMarchand, Societe Generale's managing director for international
\noperations, said in an interview with Dow Jones.<\/p>\n
Indonesian President Soeharto has resisted many of the reforms
\nrequested by the International Monetary Fund, which has led to
\nthe suspension of IMF emergency funds to the country.<\/p>\n
However, Indonesia has signed a proposal to restructure its
\nprivate foreign debt, which it will present to the IMF, a senior
\nIndonesian government official said earlier Thursday.<\/p>\n
Societe Generale provisioned a total of FRF4 billion (US$653
\nmillion) for Asian risks in its 1997 accounts. The company has
\nabout $4 billion in South Korean exposure and $800 million in
\nIndonesian exposure.<\/p>\n
However, the bank has made it clear that it sees future risks
\nemerging in Indonesia rather than in any other Asian countries
\nwhich have been hit by the region's financial woes.<\/p>\n
Chairman and Chief Executive Daniel Bouton said in the
\ninterview that he expects South Korea to rebound quickly, once
\nits outstanding foreign debts have been reorganized.<\/p>\n
Societe Generale represented French banks in the recently
\ncompleted rollover of short-term bank debt between international
\ncreditor banks and their South Korean counterparts.<\/p>\n
Of other countries in the region which have accepted IMF aid
\npackages or undertaken IMF-style reforms, Thailand is \"being a
\ngood student for now, but the Philippines and Malaysia are still
\nunder observation,\" Bouton said.<\/p>\n
As a result, the bank has less to fear about its business in
\nthose countries. Societe Generale's newly acquired Asia Credit
\nPCL unit in Thailand could be profitable immediately, Bouton
\nsaid.<\/p>\n
Bouton said: \"If we provisioned enough, (our Thai operations
\nare) profitable immediately because...despite a significant drop
\nin banking volumes, margins are much higher.\"<\/p>\n
Societe Generale took majority control of Asia Credit PCL in
\nearly March and said it will inject 2.75 billion baht into the
\nThai bank.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/societe-generale-bank-still-gloomy-on-ris-prospects-1447893297",
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