Bank Duta to transmit loans to village cooperatives

JAKARTA (JP): Publicly listed Bank Duta will assist the government in channeling Rp 20 billion (around US$2.35 million) in subsidized loans to village cooperatives.

Bank president Suwarsono said here on Thursday Bank Duta would cooperate with PT Pos Indonesia and the Confederation of Primary Cooperative Associations (Inkud) in the disbursement of the loans.

With an interest rate of 16 percent per annum, the loans will be distributed to 60 village cooperatives (KUDs), which will use the loans to purchase fertilizers for their crops, he said, adding that the soft loans will come from the government's small- scale credit program.

"We will start by channeling Rp 7 billion to 20 KUDs," he said after signing a cooperation agreement with Pos Indonesia and Inkud.

Suwarsono said the Hasanuddin Primary Cooperative Association in Ujungpandang, South Sulawesi, would supervise this Rp 20 billion government-sponsored soft loan program.

He said PT Pos would provide its network of communications facilities to Bank Duta and Inkud.

PT Pos has some 5,000 management offices, 25,000 post offices that can be used as payment points and 10,000 couriers spread across the country's 27 provinces.

To complement PT Pos' network, Bank Duta also will make use of its network of offices and facilities, Suwarsono said.

Bank Duta has 90 branch offices and over 500 on-line automated teller machines.

Suwarsono said Bank Duta remained confident it had a place in the country's banking industry and it would prefer to become a bank for cooperatives and small companies.

Bank Duta is one of seven banks which were taken over by the government in mid-March due to their deteriorating financial situations.

There were earlier reports the bank would be merged by the Indonesian Bank Restructuring Agency (IBRA) with a number off other banks taken over by the government.

Besides Bank Duta, those banks reportedly to be merged were Bank PDFCI, Bank Pos Nusantara, Bank Rama, Bank Jaya Internasional and Bank Nusa Nasional.

Suwarsono said Bank Duta asked IBRA not to include it in the merger and allow it to transform itself into a bank for cooperatives and small business.

"IBRA will decide sometime in October whether Bank Duta can go on by itself and be dropped from the planned merger," he said.

He said the founding shareholder of Bank Duta, the Supersemar Foundation, had given the green light on the plan to inject any fresh funds needed to raise the bank's equity.

"We have also invited other parties who are interested in Bank Duta to invest in the bank, subject to IBRA's approval of the bank's plan to avoid the merger," he said.

Inkud chairman Nurdin Khalid said Inkud was among those parties interested in injecting funds in Bank Duta to raise its equity.

"We are ready to inject between Rp 200 billion and Rp 300 billion into Bank Duta as part of our effort to promote the country's cooperatives and small companies," he said.

Bank Duta booked a net loss of Rp 582 billion (around $69 million) as of June, compared to a net income of Rp 26.5 billion over the corresponding period of the previous year.

The bank's net equity stood at minus Rp 2.8 trillion with Rp 3.6 trillion in total assets as of June, compared to a net equity of Rp 527 billion with total assets of Rp 8.1 trillion at the same point last year. (udi)