Bank NISP plans rights issue for its expansion

JAKARTA (JP): Bank NISP, a publicly listed bank based in Bandung, will issue rights shares this year to raise funds to finance its expansion.

NISP president Pramukti Surjaudaja said the expansion plan would boost lending capacity and entail the purchase of loan portfolios from ailing banks now under the supervision of the Indonesian Bank Restructuring Agency (IBRA).

"We are planning to take over loan portfolios in at least two banks under the supervision of IBRA. Funds for this will be from the proceeds of the rights issue," Pramukti said after the bank's annual shareholders meeting.

He added that NISP also planned to acquire stakes in a financing company and an insurance firm.

The government categorized NISP as one of 73 "sound" banks in March when it closed 38 other institutions.

The bank booked a slight increase in net profit in 1998 to Rp 25.15 billion from Rp 24.18 billion the previous year. The medium-sized bank's performance was far better than larger banks, most of which fell into the red due to the country's economic crisis.

In the first quarter of this year, NISP's net profit was Rp 6 billion, down from Rp 6.7 billion in the same period of 1998.

NISP is looking at 25 percent projected net income growth for 1999 on improved levels of domestic interest rates, according to its vice president Parwati Surjaudaja.

Shareholders approved the rights issue and a proposal to pay a cash dividend of Rp 12.5 per share for the 1998 financial year.

The company said it would pay the dividends in the third quarter, subject to approval from the central bank.

Parwati also said the bank will split its shares' par value from Rp 500 to Rp 100 prior to the rights issue. (udi)