Bank Mashill says it's ready to merge to increase capital

Bank Mashill says it's ready to merge to increase capital

JAKARTA (JP): Publicly listed Bank Mashill said on Saturday it
was ready to merge with other banks as part of the government-
sponsored banking restructuring program.

The bank's president, Dradjat Bagus Prasetyo, said Bank
Mashill was open to offers to merge with any bank, especially
with those which had passed the government's due diligence.

"Our bank is ready and is open to mergers with any banks which
have passed due diligence," he said in his year-end media
statement.

Merging with other banks is one of alternatives recommended by
the government to strengthen capital structure.

The government will recapitalize 70 of 166 national banks as
part of the restructuring program of the country's ailing banking
industry.

Banks qualified to join the capitalization program are those
which have a capital adequacy ratio of between 4 percent and
minus 25 percent. Those which do no qualify should inject fresh
funds or risk being closed.

Bank Mashill said earlier that it was preparing a merger with
Jayabank International, Bank Artamedia and Bank Ciputra. The
merger, in which Bank Mashill will become the surviving bank, is
expected to be completed early next year.

Under the planned merger, Jayabank shareholders will control
23.67 percent of the merged bank, Bank Artamedia 23.67 percent,
Bank Ciputra 11.07 percent and Bank Mashill the remaining 41.59
percent.

Bagus also said that Bank Mashill would continue to expand its
fee-based income operations in the years ahead to offset the
decline in interest income.

He said the bank would also raise lending portfolio to retail
customers and cooperatives in line with the government's program
to empower small and medium enterprises in the next three years.

"We believe that only small and medium business will grow in
the coming years while the business of large corporations will
remain in the consolidation stage," he said.

The bank will also concentrate on nondirect funding services
like issuing letters of credit and bank guarantees, he said.

"We do not have any problem at all with our corresponding
overseas banks," Bagus said.

Bank Mashill also has been appointed by the government to
channel two-step loans provided by international agencies.

Bagus said two-step loans channeled through his bank to local
companies had so far reached US$16 million. (aly)