Bank Mandiri told to transfer bad loans

JAKARTA (JP): Finance minister Bambang Sudibyo said on Monday state Bank Mandiri should "immediately" transfer its remaining bad loans to the Indonesian Bank Restructuring Agency (IBRA).

He said there should be no more delays in the transfer of the bad loans to the agency.

"All category five (bad) loans must be transferred (to IBRA)," Bambang told reporters following a monthly meeting with the central bank.

Under the government bank recapitalization program, all recapitalized banks must transfer their bad loans or category five loans to IBRA to have a clean balance sheet.

The government completed the recapitalization of Bank Mandiri in December by injecting some Rp 178 trillion worth of bonds.

Bank Mandiri passed some Rp 76 trillion in bad loans to IBRA last year. This represents about half of its total bad loans.

Bank Mandiri, the country's largest bank, was formed in July 1999 through a merger of Bank Bumi Daya (BBD), Bank Dagang Negara (BDN), Bank Ekspor Impor (Bank Exim) and Bank Pembangunan Indonesia (Bapindo).

Separately, IBRA senior official Andreas Bunanta said on Monday that there were about Rp 23 trillion in bad loans left at Bank Mandiri.

He said the bank said it wanted to manage and restructure about Rp 9 trillion of the loans until June this year.

He said the remaining Rp 14 trillion should have been transferred by the end of last year.

State banks were treated as the cash cows of politicians and well-connected businessmen in the past during the authoritarian rule of former president Soeharto.

There has been increasing concern that state banks joining the government bank recapitalization program were trying to keep the bad loans out of IBRA's hands.

State Bank BNI has recently been attacked by the media on allegations that it was trying to keep bad loans owed by integrated textile Texmaco Group.

The loans were finally transferred by BNI late last week after the central bank issued a ruling for the transfer.

The Texmaco loans transferred by BNI totaled more than Rp 9 trillion.

Texmaco was hit by controversy last year after a minister revealed that the company had used its connection with former president Soeharto to obtain more than Rp 9 trillion in loans from Bank BNI.

The government is set to soon recapitalize publicly listed Bank BNI. (rei)