Bank Danamon ready to help ailing banks

Bank Danamon ready to help ailing banks

JAKARTA (JP): Bank Danamon said it was ready to help ailing
banks even though it has not yet received a formal requirement
from Bank Indonesia (the central bank) to do the job, the bank's
executive said yesterday.

The bank's director Soesilo Otomo said there was no formal
mandate yet, but would be "very happy if we are involved and are
ready to do the job".

The government has enlisted about eight private banks to help
the country's ailing banking system. They include Bank Central
Asia, Bank Niaga, Bank Nusa, Bank Danamon, Bank Lippo, Bank Umum
Nasional, Bank Bali and Bank Internasional Indonesia.

"We learned about Bank Danamon's appointment only from
newspapers," he said. "If we're appointed, we'll feel proud
because it is really a great honor... it shows Bank Indonesia's
trust in us."

Bankers in Jakarta said the eight banks had been requested by
Bank Indonesia to handle the problems of ailing banks.

Kompas reported yesterday that the central bank had requested
each of the eight banks to provide two experts each "to deal with
problematic loans" of the insolvent banks.

Economists said the International Monetary Fund (IMF) would
require the Indonesian government to carry out structural reform
of the country's crowded banking industry as a condition of its
financial aid.

Bank Danamon, listed on Jakarta and Surabaya stock exchanges,
reported a 9 percent increase in net profit to Rp 156 billion
(US$44.57 million) in the first three quarters this year from Rp
142 billion in the same period last year.

The bank's total assets rose by 9 percent to Rp 26.3 trillion
in September from Rp 24.08 trillion in June.

He declined to set a net profit target for this year. (aly)