Bank NISP, Bank Bira talk with foreign investors

JAKARTA (JP): Publicly listed Bank NISP is at an advanced stage of negotiations with foreign investors to take a significant stake in the bank.

President of Bank NISP Pramukti Suriaudja said yesterday the bank was in serious negotiations with foreign financial institutions from Europe, the United States and Singapore who were interested in taking a significant portion of its shares by later this year.

He said talks were in the final stages.

"We expect to sign the memorandum of understanding in August or September this year," he told a media conference.

He said the bank was also seeking to merge with local listed and nonlisted banks to meet the new paid-up capital requirement of Rp 1 trillion (about US$117.64 million) by the end of this year.

Bank Indonesia, the central bank, has ruled that local banks should increase their minimum paid-up capital to Rp 1 trillion by the end of this year, Rp 2 trillion by 2000 and Rp 3 trillion by the end of 2002.

Pramukti said negotiations with overseas investors had covered details such as the share price, the board of management and future business plan to boost the bank's performance amid the economic crisis.

He declined to mention either the names of the local banks or the foreign investors.

"We have been asked to not disclose their names yet," he said.

He identified the prospective U.S. foreign investor as a mutual fund management company and added that the European was a commercial bank.

Entry of foreign investors was expected to change Bank NISP's share ownership, with foreign shareholders accounting for 30 percent, the public 23 percent and the remainder held by the founding shareholders.

Present shareholders are PT Udawirya Utama (33.46 percent), PT Suryasono Sentosa (33.46 percent), Karmaka Surijaudja (0.08 percent) and the public (23 percent).

Pramukti said Bank NISP, which recorded total net profit of Rp 22.99 billion last year, extended total credits of Rp 1.4 trillion as of February this year.

He said the bank raised Rp 1.7 trillion in third-party funds by February, of which 25 percent consisted of savings accounts and 38 percent of time deposits.

Pramukti added that the bank experienced no difficulties with payment of its foreign exchange debts amounting to US$24 million.

Bank NISP, he added, had repaid around $19 million of its overseas debts early this month and the remainder would be paid in August.

Most of the debts were to Japanese, American and European financial institutions.

"We do not have any problem with our foreign creditors as most of our overseas debts are long term," he said.

Pramukti said his bank's prudent management had been accorded global recognition with the Asian Banking Award it received for credit quality from the Asian Banking Digest magazine last month.

"This shows that Bank NISP has performed well over the past few months despite the crisis," he said.

Separately, Bank Bira's corporate advisor Parveen Gandhi told The Jakarta Post yesterday that the bank was currently in the preliminary process of negotiations with several foreign institutions for a strategic alliance or to become a significant shareholder.

Bank Bira is also still in preliminary merger talks with several domestic listed and nonlisted banks, he said.

"We are still in very preliminary talks about a plan to merge with a few listed and nonlisted banks to become a strong bank."

Due to the tentative nature of the negotiations, Gandhi declined to mention the names of the prospective investors. (aly)