Bank Bira wins BankWatch's rating on promissory note

JAKARTA (JP): The publicly-listed Bank Bira has won a grade TBW-3 debt rating from the New York-based Thomson BankWatch rating agency for the bank's short-term US$20 million promissory note, a bank executive says.

"The rating of grade TBW-3, which is the first granted to an Indonesian bank, reflects our good financial performance in banking services over the past few years," Bank Bira's director Bambang Panutomo told reporters here yesterday.

The criteria of the rating includes the capital adequacy ratio (CAR), credit liquidity, portfolio management, equity capital and various financial services, he said.

So far BankWatch has introduced the TBW short-term credit ratings, ranging from TBW-1 to TBW-4 grades for the banking industry, on the basis of the banks' financial performance and services.

Grades TBW-1 and TBW-2, which demand much heavier requirements in term of financial performance, have been granted to commercial banks from Japan, the United States and European countries, Bambang said.

"The rating of the grade TBW-3 is then significant for us. It also indicates that our bank's capacity to service principal and interest in a timely fashion is considered adequate," he said.

He reported that the bank, which was listed on the Jakarta Stock Exchange in July this year after offering 25 percent of its enlarged share capital to the public, posted a CAR ratio of 14.8 percent as of September, up from 11.9 percent last December, while its equity capital stood at Rp 108 billion compared to Rp 40 billion at the end of last year.

He added that the bank's return on average assets (ROAA) was at 3.10 percent as of September compared to 1.32 percent in December last year, and its return on equity (ROA) grew to 15 percent from 9.92 percent previously.

Commitment

Bambang said that the $20 million promissory note, which has been assigned the grade TBW-3 rating, is now being arranged by Merrill Lynch company.

"We have received a full commitment from Merrill Lynch for the issuance of the promissory note," he said. The note will be issued in January, he added.

The commercial paper, which will carry an interest rate of seven percent per year, would be intended to finance credit exports discounted by the bank's exporters.

He noted that the discounted credit exports have reached $35 million at the bank as of September. "Meanwhile, our total credit expansion has reached Rp 800 billion," he added.

Bambang predicted that its after-tax profit will reach Rp 17.5 billion by the end of this year, six percent higher than an original projection made at the time of its initial public offering. (fhp)