Bank Niaga gets 'BB' rating

Bank Niaga gets 'BB' rating

JAKARTA (JP): Standard & Poor's has assigned its 'BB' long-
term and 'B' short-term foreign and local currency ratings for
Bank Niaga.

The international rating agency said in a statement yesterday
that the ratings reflected the positive factors of the bank's
acceptable asset quality, adequate provisioning and prudent
management.

The publicly listed Bank Niaga, with unaudited assets of Rp
6.81 trillion (around US$2.91 billion) at June 30, 1996, is
Indonesia's 13th largest bank with a 1.6 percent market share of
the country's commercial banking assets at Dec. 31, 1995.

The agency said that the central bank's tighter capital
adequacy requirements together with Bank Niaga's own asset
growth, was likely to compel the bank to raise further equity,
which might necessitate further dilution of the major
shareholders's stake.

On the business front, competition in its core middle-market
commercial sector was likely to continue to increase which, in a
higher interest rate environment, may reduce interest margins and
non-interest revenues in the short-to-medium term, it noted. (hen)