Bank Bali seeking to sell majority stake to foreign bank

Bank Bali seeking to sell majority stake to foreign bank

SINGAPORE (Dow Jones): Bank Bali, widely seen as one of a
handful of big Indonesian banks that remains solid, is seeking to
sell majority ownership to a foreign bank, its chief executive
said.

Rudy Ramli, president of the listed bank, told Dow Jones
Newswires during a recent visit to Singapore that the bank hopes
to find a foreign partner by the end of the year. The selected
foreign bank would get majority ownership by taking up newly
issued shares that would recapitalize Bank Bali, he said.

Rudy said that 12 foreign banks have responded to invitations
Bank Bali made to prospective buyers after hiring J.P. Morgan
Securities Asia as its private placement advisor. The bank
president declined to name any of the interested parties or
speculate on who might emerge as the buyer.

A Singapore banker, however, said she believes Dutch bank ABN-
AMRO, which has bought into Thailand's Bank of Asia, might be a
prime candidate for buying into Bank Bali.

According to Rudy, whose family is a shareholder in the bank,
a foreign bank would be welcome to buy "about 60 percent or maybe
even 80 percent" of Bank Bali.

Bank Bali is one of the five biggest Indonesian banks that
haven't been taken over by the government's Indonesian Bank
Restructuring Agency this year. Privately owned banks under IBRA,
as the agency is known, include PT Bank Central Asia, controlled
by the Salim Group.

Rudy said Bank Bali, which currently has 285 branches and
assets of about Rp 20 trillion (about US$1.8 billion), has seen a
sharp rise in deposits in recent months. He said deposits at the
beginning of September totaled Rp 10.3 trillion, compared with
less than half that at the beginning of the year.

For the first six months of this year, Bank Bali reported a
net profit of Rp 67.9 billion, compared with Rp 75.9 billion in
the same period a year ago. It increased its loan-loss provisions
to Rp 802.8 billion from Rp 100.7 billion in the first half of
1997.

Last week, Bank Bali said in a statement that it had asked
IBRA if Bank Bali could take over 200 to 300 branches of trouble-
ridden banks currently under the agency's supervision. It isn't
clear yet if IBRA will approve the request.

While in Singapore, Rudy said the plan to add hundreds of
branches to its network "doesn't really depend on getting in a
foreign partner." Under the expansion proposals, Bank Bali would
simply take over the branches and their staff, and not the loans
of those branches. "We would buy physical assets," he said,
estimating that the plan could result in Bank Bali taking on more
than 2,000 staff laid off by problem-ridden Indonesian banks.

Bankers in Singapore and Jakarta say that even Indonesian
banks that have steered safely through the country's deep
economic crisis are in need of greatly boosting their capital.

"Banks like Bank Bali have good operations, but all banks are
facing big provisions and problems so they have no choice but to
recapitalize," said a Singapore banker, who declined to be named.