Bad debts higher in April: Bank Indonesia

JAKARTA (JP): The number of bad loans at commercial banks rose again to 4.24 percent of total outstanding credits as of April, up from 3.99 in December and 3.88 percent in September last year.

Governor of Bank Indonesia J. Soedradjad Djiwandono disclosed yesterday at a hearing with the Trade and Finance Commission of the House of Representatives that the total amount of bad loans had reached Rp 9.78 trillion (US$4.4 billion).

The seven state banks had Rp 7 trillion in bad credits, of which almost Rp 3 trillion was recorded at Bank Pembangunan Indonesia (Bapindo).

"If we exclude Bapindo from the list, the amount of bad loans actually decreased," the central bank governor said, adding that the bad loans at Bapindo had increased due to an upward revision of previous data on the basis of fresh findings.

Soedradjad said that, excluding Bapindo, bad loans at commercial banks had decreased to 3.11 percent of outstanding credits as of April, as compared with 3.29 percent in December and 3.24 in December 1993.

"It shows that our efforts to settle bad loans have yielded results," Soedradjad said.

Task force

The central bank established a task force to deal with bad loans, especially at state banks, in April 1993, just after the disclosure of a loan scam at Bapindo involving more than $430 million in unpaid debts.

Businessman Eddy Tansil and a number of the bank's directors were imprisoned after being convicted of corruption in relation to the loan scandal.

In the wake of the scandal the government restructured the bank's management and finances with assistance from Standard Chartered Bank of Britain.

"After the restructuring, I can assure you that the performance of Bapindo has been getting a lot better," Hendrobudiyanto, Bank Indonesia's director for the supervision of commercial banks, told yesterday's hearing.

Soedradjad said the collectibility rate of loans provided by the seven state banks had decreased slightly as of April to 81.12 percent, equivalent to Rp 89.42 billion, from 81.37 percent in December.

Excluding Bapindo, the collectibility rate at the state banks increased to 85.99 percent, equivalent to Rp 84.18 billion, as of April from 85.39 percent in December and 83.37 percent in September last year.

Other banks

In addition to Bapindo, the state banks include Bank Tabungan Negara, Bank Dagang Negara, Bank Negara Indonesia, Bank Bumi Daya, Bank Rakyat Indonesia and Bank Ekspor Impor Indonesia.

Soedradjad also disclosed yesterday that, as of April, private national foreign exchange banks had Rp 1.03 trillion in bad debts, private national banks not dealing in foreign exchange banks Rp 762.4 billion in bad debts, local development banks Rp 514.6 billion in bad debts, foreign banks Rp 76.6 billion in bad debts and joint-venture banks Rp 391 billion in bad debts.

Despite the increase in bad loans, the governor said, problem loans at all commercial banks (including Bapindo) had decreased to 2.58 percent of total outstanding credits as of April, from 3.36 percent in December and 3.56 percent in September last year.

Doubtful loans at all commercial banks also decreased to 5.42 percent of outstanding credits April, from 4.7 percent in December and 5.62 in September last year.

The collectibility rate at all commercial banks shrank slightly to 87.77 percent as of April from 87.94 percent in December last year but increased from 86.94 percent in September last year. (rid)