Bad debts higher in April: Bank Indonesia

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)