Bank DKI to merge with provincial banks

Bank DKI to merge with provincial banks

JAKARTA (JP): City-owned Bank DKI plans to merge with
provincial banks in order to meet the central government's
requirement of a minimum paid-up capital of Rp 1 trillion by the
end of the year, an official said.

"The bank has no other choice if it wants to meet the required
capital, even though there are only a few qualified provincial
banks," Deputy Governor for Economic Affairs Harun Al
Rasyid said Thursday

The only qualified regional banks are those in Java and Bali,
he said.

Harun did not disclose when the plan, to be coordinated by the
Ministry of Home Affairs, would be realized.

The city administration will not add to the bank's equity
before the merger "as the bank has quite big equity as a foreign
exchange bank", he said.

Based on its latest financial report, Bank DKI's paid-up
capital -- as of Sept. 30 last year -- totaled Rp 172.5 billion
with assets worth Rp 4.37 trillion.

It reported a net profit of Rp 35.5 billion during January
through September last year.

Harun said Bank DKI's performance was the soundest compared to
those of other provincial banks.

Bisnis Indonesia daily reported earlier that the merger of the
country's 27 regional banks would only be able to accrue capital
worth Rp 800 billion.

As the best performer among the 27 banks, Bank DKI might face
an uncertain future, Harun said.

"We don't even know what the bank will be like after the
merger."

The central government requires all banks -- by the end of
this year -- to have a minimum capital of Rp 1 trillion for the
first year and Rp 3 trillion in two years.

During Monday's plenary session on the city's draft budget,
councilors from Golkar and Indonesian Democratic Party factions
suggested the municipality take immediate steps to ensure the
bank meets the end-of-year deadline. (ind)