Bank Artha Graha wins IBRA's loan auction

JAKARTA (JP): Bank Artha Graha has won a tender to buy portfolios of small loans, each loan worth less than Rp 5 billion (about US$58,225), from the Indonesian Bank Restructuring Agency (IBRA).

The agency said on Thursday that Bank Artha Graha outbid several other banks and financial institutions, which took part in the tender, the second tranche of its loan sales program.

The head of IBRA's Asset Management Credit (AMC) unit Irwan Siregar said that the credits, which were auctioned, consisted of mortgage loans and auto loans formerly owned by nationalized, closed and recapitalized banks.

The loans auctioned in the second tranche were divided into four lots where the highest bid for lots 1, 2 and 3 were all submitted by Bank Artha Graha.

Bidding for Lot 4 was canceled because there was only one bidder.

Lot 1 included mortgage portfolios formerly owned by 17 closed banks with total outstanding loan principals of Rp 341.8 billion as of June 30. The highest bid of Rp 188 billion was offered by Bank Artha, representing a recovery rate of 55 percent.

Lot 2 comprised mortgage portfolios formerly owned by nine liquidated banks and three recapitalized banks with total outstanding loan principals of Rp 177.9 billion as of June 30. It received a high bid of Rp 88.96 billion also from Bank Artha, reflecting a recovery rate of 50 percent.

Lot 3 contained mortgage portfolios formerly owned by 10 taken over banks with total outstanding loan principals of Rp 260.75 billion as of June 30. Bank Artha submitted the high bid of Rp 112.12 billion, a recovery rate of 43 percent.

The tender process began on July 11 with the issuance of an information memorandum. The due diligence data room was available to registered parties from July 12 to Aug. 22, he said.

Irwan said that eight domestic and two foreign institutions participated in the due diligence process. They were Bank Artha, ABN Amro Bank, Bank Internasional Indonesia (BII), Bank Danamon, Bank Niaga, Bank Mandiri, Bank CIC, Bank BTN, Cargill Investment, and Lone Star. (10)