Bank NISP may seek new investors to merge

JAKARTA (JP): Publicly listed Bank NISP has said it is considering seeking new investors in order to meet the central bank's new minimum paid-up capital requirement.

Bank NISP president Pramukti Surjaudaja said here yesterday a merger with other domestic banks was also a possibility to fulfill the new capital requirement of Rp 1 trillion (US$111 million) which goes into effect at the end of this year.

Bank NISP has two joint venture operations: Daiwa Perdania Bank and Bank OCBC-NISP.

Bank Indonesia (BI) has set new capital requirements of Rp 1 trillion by the end of 1998, Rp 2 trillion by 2000 and Rp 3 trillion by 2003.

Pramukti said he was convinced the bank would be able to meet the new requirements.

He also said NISP has made preparations regarding other new BI policies including interest rate limits and a 2 percent monthly growth in loans and foreign exchange deposits.

He explained that the bank would continue with efficiency measures to perform at a higher margin, pointing out that its cost-to-income ratio significantly decreased from 59.1 percent in 1996 to 48.1 percent in 1997.

The bank will also increase its fee-based income, Pramukti said, adding that such revenues rose from 15.9 percent of total income in 1996 to 22.8 percent last year.

He said NISP performed well in 1997. Based on an unaudited financial report, its loan-to-deposit ratio stood at 75.48 percent. BI's maximum level is 110 percent.

The bank is also a net lender, extending some 22 percent of its deposits of Rp 909.1 billion to the interbank market every day, he said.

The bank's credit growth was 33 percent last year, while public deposits rose 40 percent to Rp 1.4 trillion.

Its capital adequacy ratio (CAR) stood at 12.06 percent, well above BI's minimum ratio of 9 percent, he said. Returns on average assets were 2.16 percent and returns on average equity were 22.73 percent. (08)