Bank Niaga expects net loss in first quarter
Bank Niaga expects net loss in first quarter
JAKARTA (JP); Publicly listed Bank Niaga is expecting a net
loss in the first quarter this year against a net profit of Rp
31.81 billion (about US$3.18 million) over the corresponding
period last year, its president said yesterday.
Gunarni Suworo said the predicted downturn was due to the
increase in the loan loss provision to Rp 39.8 billion.
"Our income will become negative due to the increase in loan
loss provision for possible bad debts," she said after a
shareholders meeting .
Gunarni declined to mention the amount of the loss.
The bank, which recorded a 54.51 percent decline in net
profits to Rp 44.57 billion last year, had also increased its
loan loss provision to Rp 207.1 billion in 1997 from Rp 64.9
billion the previous year, she added.
"The increase of loan loss also caused our net profit to
decline sharply in 1997."
She warned that the country's economic predicament, which is
expected to worsen in the coming months, would cause most
companies to face problems in repayment of loans to the banking
system.
The inevitable result would be the likelihood of mounting bad
debts.
She said Bank Niaga expected bad debts to increase from
between 15 percent to 30 percent this year, similar to the
average growth rate of bad credits in the national banking
industry.
The bank's problem loans, which include doubtful and bad
credits) reached 5 percent, she said, adding that bad credit
alone was 0.9 percent.
"Due to this, there will be no more expansion plans this
year."
The bank, which allocated total credits of Rp 9.09 trillion by
the end of 1997, is also seeking foreign investors to boost its
capital.
"But it is still in the preliminary stage and hopefully it
will be finalized by the end of this year."
She declined to identify the foreign institutions involved
because "it is too early".
Gunarni said the bank had obtained approval from its
shareholders to raise its capital to Rp 1.4 trillion from the
current Rp 750 billion as part of its move to meet the new
capital requirement set by the central bank.
Bank Indonesia raised the minimum capital requirement for
commercial banks to Rp 1 trillion by year-end, Rp 2 trillion in
2000 and Rp 3 trillion in 2003 as part of the measures to
revitalize the country's financial sector.
Gunarni also denied rumors the bank was experiencing liquidity
problems and was poorly managed after Hashim Djojohadikusumo's
Tirtamas Group failed to make a full payment on its planned
acquirement of the Tahija's family's 40 percent shares.
In July last year, Tirtamas' financial holding company Tunamas
Panduarta bought a 10 percent stake in Bank Niaga through a
public tender offer.
It also entered into an agreement with Tahija's wholly owned
Austindo Teguhjaya and Austindo Nusantara Jaya to buy the
latter's 75.63 million shares, or 40 percent of the bank's
capital, at Rp 8,000 per share.
"I do not know about this transaction, but it is based on a
'willing buyer and willing seller' transaction," she said.
According to the bank's 1997 financial report, Austindo
Teguhjaya retains a 10.49 percent stake in the bank and Tunamas
has 39.51 percent.
Other shareholders are RHB Bena Sdn. Bhd. with 20 percent,
life-insurer AJB Bumiputera 1912 with 5.42 percent and the public
with 24.57 percent. (aly)