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)