Bank Mandiri chief vows to go ahead with planned IPO

BATAM (JP): The president of giant state Bank Mandiri, Robby Djohan, vowed to press ahead with plans to offer between 25 percent and 30 percent of the bank's shares through an initial public offering (IPO) in October.

Robby said he planned to meet with the minister of finance this week to convince him the IPO would be good for the country, and that Bank Mandiri was the most "suitable" state bank to go public this year.

"I am planning to talk with the minister of finance next week," Robby said over the weekend following a business gathering.

"It's true that there are still many internal matters to be settled, but according to my calculations this can be completed soon," he said.

Robby said four investment banks -- Solomon Brothers, Deutsche Bank, Goldman Sachs and CS First Boston -- had made presentations and all had said Bank Mandiri was ready to go public in 2000.

"This year we expect a (net) profit of Rp 750 billion, but with the current organization and our capital base potential, the profit could jump to between Rp 2 and 3 trillion over the next two to three years," he said.

Robby said Bank Mandiri focused its lending on medium-sized businesses and looked to control 30 percent of this market.

"This should be appealing to investors .... (This year) is the best time for us to go public. But if we wait for another two years, nobody would buy. This is the right time to buy," he said.

Bank Mandiri plans to raise between US$1.2 billion and $1.5 billion through the IPO to help finance its credit expansion.

Robby also said the IPO would be good for the country. "This would be a benchmark showing that Indonesia is trusted by investors again."

Minister of Finance Bambang Sudibyo indicated last week state Bank Rakyat Indonesia (BRI) was ready to go public this year.

Speaking during a hearing with the House of Representatives, Bambang said several foreign investors had expressed their interest to him in BRI.

He also said BRI was attractive to foreign investors because of the bank's focus on financing small-scale agro industries, which have been relatively unharmed by the country's economic crisis.

"If the minister of finance says he prefers BRI to go public first, we can only follow him since he is the (bank's) shareholder," Robby said.

Bank Mandiri was formed in August last year through the merger of four state banks -- Bank Bumi Daya, Bank Pembangunan Indonesia, Bank Ekspor Impor Indonesia and Bank Dagang Negara.

The government recently recapitalized the bank through the injection of some Rp 178 trillion in bonds to raise the bank's capital adequacy ratio (CAR) above the minimum 4 percent.

Robby recently said the bank's CAR should reach around 12 percent by the end of this year.

Bank Mandiri plans to provide some Rp 8 trillion in new loans this year, he said.

The bank, which has over 730 branches, is currently in the process of completing its on-line operations. (rei)