American Express confident with RI's banking system
American Express confident with RI's banking system
JAKARTA (JP): American Express Co. (Amex), a multinational
travel and financial services firm of the United States, has
confidence in the Indonesian government's handling of current
problems in the banking industry, the company's president said.
"I'm confident that the banking problems will be solved,"
Jeffrey E. Stiefler, Amex's president, told newsmen here
yesterday.
Standard & Poor's, a New York-based credit rating company, had
assessed the Indonesian banking sector as "a high risk
environment" and "undergoing a period of financial stress"
following the government's 1988 policy allowing rapid expansion
of the industry.
Regardless of the ominous report, Stiefler stated that he is
confident with future prospects for Indonesia's banking sector.
"We are optimistic about the way your central bank is handling
this matter," he said.
Stiefler acknowledged that the Indonesian banking system may
have some "credit quality problems" and an "overcapacity in the
market."
The government's deregulation measures of the banking sector
in 1988 have led to a rapid expansion of private commercial banks
in the country. Indonesia has around 200 commercial banks.
The American executive reasserted his optimism. "I'm not
terribly disturbed by these problems," he said.
"It is only a small misstep which will be resolved quickly,"
Stiefler added.
He also stated that his company's business in Indonesia "is
not affected by the problems described by Standard & Poor's."
Stiefler declined to disclose projections for Amex's banking
and travel operations in Indonesia. He also refused to state the
figures on the average annual spending of Indonesian Amex card
holders.
Tourism
Stiefler said Amex enjoys steady growth in its banking and
travel operations in Indonesia.
Amex has formed a 10-year strategic alliance with the
Indonesian Tourism Promotion Board (BPPI). The company donates
US$500,000 annually to the Board for tourism promotion program.
Under the program the Amex Card which is accepted by 3.6 million
merchants around the world, including 8,000 in Indonesia, is
named the official travel card during the Visit Indonesia Decade.
Indonesia's tourism generally lags behind other countries in
the region including Thailand and Singapore.
G. Bill Pardos, the company's vice president in charge of
travel services in Indonesia, explained that the Indonesian
government has been committed to balancing the growth in tourism
with "ecological and cultural considerations."
The government has said it wants to increase the number of
tourists visiting Indonesia to 3.9 million this year from 3.4
million last year.
Amex, which registered total assets of $94 billion as of last
year, posted $353 million in net incomes from all of its
worldwide operations in the first quarter of this year, compared
to $243 million in the same period last year. (04)