Bank Niaga loses $475m

JAKARTA (JP): Publicly listed Bank Niaga has reported a net loss of Rp 3.8 trillion (about US$475 million) in 1998, a reversal from its Rp 48 billion net profit the previous year.

The massive deficit mainly resulted from a sharp interest loss due to a negative-spread situation and the fat provision for bad debts, which totaled Rp 3.6 trillion.

The bank booked interest income of Rp 2.6 trillion in 1998, but paid a higher interest expense of Rp 3.9 trillion, resulting in a net interest loss of Rp 1.3 trillion.

The deteriorating quality of the bank's credit portfolio increased its bad debt provision to Rp 2.3 trillion in 1998 from Rp 180 billion the previous year.

Bank Niaga was taken over by the government last month following the failure of the bank's majority shareholders to provide fresh funds for its recapitalization.

The government subsequently appointed a caretaker team led by Rudy Capelle to run the bank. Members of the team include Paulus Wiranata, Daniel James Rompas, Kathay Gusti, Andreas E. Susetyo, Andi Mohammad Hatta and Sigid Moerkardjono. (udi)