Bank Bira wins BankWatch's rating on promissory note

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)