Bank Mandiri suffers Rp 6.81t net loss in two months
Bank Mandiri suffers Rp 6.81t net loss in two months
JAKARTA (JP): Bank Mandiri reported on Tuesday a consolidated net loss of Rp 6.81 trillion during its first two months of operations from Aug. 1 until Sept. 30.
The bank's president, Robby Djohan, said the bank's net interest loss resulting from a negative interest spread reached Rp 2.44 trillion while those due to foreign exchange losses totaled Rp 4.1 trillion.
"The unfortunate economic condition of the past has burdened our financial condition through the negative spread, loan provisions and foreign exchange losses." he said.
He hoped the bank would start to operate normally after it completed its recapitalization plan.
During the bank's first two months of operations, interest income totaled only Rp 1.89 trillion, far less than its interest spending of Rp 4.32 trillion.
Bank Mandiri was legally formed on July 31, out of a merger of four ailing state banks: PT Bank Ekspor Impor Indonesia, PT Bank Pembangunan Indonesia, PT Bank Bumi Daya and PT Bank Dagang Negara. The new bank commenced operations in August, but the full merger will not be completed until next year.
The government issued Rp 103 trillion worth of bonds on Oct. 13 for the bank. The amount represented the first tranche of recapitalization funds to be injected into the bank.
The final recapitalization tranche will be made in December, following the completion of a due diligence audit of the bank to determine the amount of the final tranche. The audit is expected to be finished soon.
Based on an initial estimate, the cost of the recapitalization to raise its capital adequacy ratio (CAR) to 4 percent will reach Rp 137.8 trillion.
However, due to faltering economic conditions the sum required to raise the bank's CAR may have increased to some Rp 164 trillion, according to Robby.
CAR is the ratio between capital and risk-weighted assets.
Robby said the delay in the bank recapitalization hurt the bank's financial condition, which in turn increased the recapitalization cost.
The bank's managing director, Agus Martowardojo, said Bank Mandiri would restructure the bank's nonperforming loans amounting to Rp 9 trillion out of the targeted Rp 13.5 trillion by the end of this year.
"Bank Mandiri has nonperforming loans of Rp 46 trillion in total," he said, adding that the restructuring of the loans would be completed by 2001.
Robby also said Bank Mandiri planned to sell part of its shares to the public next year, but he declined to elaborate on the initial public offering plan. (udi)