Bank DKI to issue Rp 500 billion in bonds this month

JAKARTA (JP): The Jakarta administration-owned Bank DKI will issue Rp 500 billion (US$205.5 million) in bonds this month to expand its lending portfolio.

The bank's president Soeharto said yesterday the bonds would mature in seven years and carry fixed and floating interest rates.

"The interest rate will be fixed at between 14.5 and 15.5 percent for the first year," Soeharto said after the bond issuance presentation.

He said from the second year the interest rate would be floated between 0.75 and 1 percent above the average deposit interest rate of five state-owned banks.

The bonds, which would be sold to the public from May 20 to 23 would be listed on the Surabaya Stock Exchange on June 6, he said.

PT Sucorinvest Central Gani and PT Bhakti Investama will underwrite the issue, and publicly listed PT Bank Negara Indonesia will act as trustee.

This is the bank's third bond issue. In 1989 the bank issued Rp 25 billion in bonds, which matured last year. Its second bond issue of Rp 75 billion publicly offered in 1993 will mature next February.

Soeharto said 60 percent of the bonds' proceeds would be used to finance toll road projects in Jakarta.

These include the Kali Malang-Bekasi toll road, the Kebon Jeruk-Cengkareng road, the Cilincing-Cikunir road, and the western link ring road, he said.

He said Bank DKI was a member of the syndicate of banks financing the toll road projects.

The remaining 40 percent of the proceeds would be used to fund other city projects, such as traditional market renovations and apartment developments.

The proceeds would also be used to finance housing credits for city officials, he said.

He said the bank might join another bank syndicate to finance the subway and three-tiered transit system projects in the city.

Bank DKI booked Rp 42.9 billion in net operating profit last year, a 3.9 percent drop from Rp 44.6 billion in 1995.

Total revenue was Rp 342 billion last year, up from Rp 215 billion in 1995.

The bank's assets rose by 5.5 to 2.42 trillion last year, and public funds made up Rp 1.14 trillion of the amount.

The bank's Capital Adequacy Ratio grew from 26 percent in 1995 to 34 percent last year.

Soeharto said the central bank, Bank Indonesia, had approved the expansion of its credit by 50 percent this year from about Rp 1.4 trillion last year.

The central bank limited the overall lending growth in bank lending to between 17 and 18 percent this fiscal year. (das)