Bank Danamon to face test before merger: BI

Bank Danamon to face test before merger: BI

JAKARTA (JP): Bank Indonesia senior deputy governor Anwar
Nasution said on Thursday plans by the Indonesian Bank
Restructuring Agency (IBRA) to merge Bank Danamon with eight
other nationalized banks could not yet be implemented because it
had yet to fulfill the central bank requirements on merger and
acquisition.

Anwar said Bank Indonesia had yet to audit the new personnel
of the board of commissioners and board of directors of Bank
Danamon.

"They have to pass our fit and proper test as one of the
requirements," he said at a media conference.

IBRA plans to merge publicly listed Bank Danamon with Bank
PDFCI, Bank Duta, Bank Nusa Nasional, Bank Pos Nusantara, Bank
Rama, Bank Tamara, Bank Tiara Asia and Jaya Bank Internasional
later this year.

The failure to meet merger requirements is likely to delay the
merger plan, which is a key bank restructuring program from IBRA.

After the nationalization of Bank Danamon, its senior
executives were replaced by top people from Bank PDFCI, which was
nationalized by IBRA after it almost collapsed in the wake of the
economic crisis last year.

Anwar said Bank Indonesia had asked PDFCI and IBRA several
times to provide the necessary documents for the fit and proper
test since July, but IBRA only gave the nod to provide the
documents on October 27.

Anwar dismissed earlier media reports that the central bank
was trying to block the merger plan of Bank Danamon.

Anwar also said IBRA could not proceed with the merger plans
if the newly merged banks could not meet the minimum four percent
capital adequacy ratio (CAR) requirement.

Anwar said if Bank Danamon merged with PDCI, their resulting
CAR level would be 17 percent, which would meet the merger
requirement.

But if the two banks were to be merged with the other seven
banks, the resulting CAR level would be negative, he said.

He pointed out that based on the August due diligence process,
the resulting CAR level of the nine merged banks was minus 59.4
percent.

Meanwhile, Bank Indonesia licensing director Sukarwan said a
fit and proper test could take between one and two weeks if the
necessary documents were complete and available.

He expected they would be able to start the fit and proper
test of Bank Danamon personnel as soon as possible. (rei)