Bank owners offer assets worth Rp 177t

JAKARTA (JP): Deputy Attorney General Soehandjono said here on Monday that the former owners of nationalized and closed banks have offered assets worth Rp 177 trillion (US$16 billion) to repay their debts to Bank Indonesia (BI).

Soehandjono said the value of pledged assets was higher than the Rp 128 trillion in liquidity support the banks received from BI, the central bank.

The former owners of the four nationalized banks -- Bank Central Asia, Bank Danamon, Bank Tiara and Bank PDFCI -- have offered assets worth Rp 89 trillion to repay the Rp 71 trillion in liquidity support they received, he said.

Soehandjono said that owners of the 10 closed banks had pledged assets worth Rp 88 trillion to repay Rp 57 trillion they received from Bank Indonesia.

However, Finance Minister Bambang Subianto said on Monday that the government needed more time to review and appraise the list of assets offered by the owners of suspended and nationalized banks.

The minister said that if the assets did not cover their obligations, the banks' former owners would have to meet the shortfall.

"We still have to check the figures and the assets. There are hundreds of companies (pledged as assets) to be reviewed... we need to check their liabilities to gauge their net worth," he told reporters following a meeting with Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita and Bank Indonesia Governor Sjahril Sabirin.

Bambang explained that the owners of banks suspended by the government had to repay the liquidity support while the owners of those which were nationalized had to return massive loans which they channeled into their own business groups.

The central bank has provided domestic banks with more than Rp 141 trillion (US$12.82 billion) in liquidity support since January to help meet massive runs on deposits by a panicked public.

The government closed down seven ailing banks in April. In August it closed three more banks and nationalized a further four. All the banks had received liquidity support equivalent to more than 500 percent of their capital.

The banks were given until midnight on Monday to return the liquidity support.

But former owners of BCA and Bank Danamon, two of the country's largest private banks, must recover the larger part of their intra-group lending by the deadline to bring loans to their own companies down to within the legal limit.

Sources said that intra-group lending at the two banks exceeded 80 percent of their outstanding loans. Existing regulations state that intra-group loans should not exceed 20 percent of a bank's capital.

Bambang said that although part of the liquidity support at Bank BCA and Bank Danamon had been converted into government equity, the owners still had to repay the outstanding amount.

They must repay all the liquidity support if they want to recover their ownership, he added.

Salim family

Asked if the assets pledged by the former owners of Bank BCA were sufficient to cover their obligations, he said: "I think they are enough, but we still have to evaluate them."

Bambang, however, declined to say which assets had been offered by the Salim family, the owner of the country's largest conglomerate.

He added that the former owners of Bank Tiara and Bank PDFCI were not bound by the Sept. 21 deadline because the two banks, now nationalized, had not breached the 20 percent limit on intra- group loans.

Sjahril said the government would focus primarily on recovering the liquidity support given to the three banks suspended in August and lowering the intra-group lending levels in the nationalized banks.

The three banks closed in August were Bank Dagang Nasional Indonesia, which received Rp 27.6 trillion in liquidity support, Bank Umum Nasional, which received Rp 6.8 trillion, and Bank Modern, which received Rp 2.1 trillion from the central bank.

The Indonesian Bank Restructuring Agency (IBRA), which is working to recover the liquidity support and restructure the ailing banks, said in a statement that the pledged assets included cash, valuable notes, equity in certain companies, land and buildings.

"Based on preliminary calculations, the value of assets pledged is enough to cover the outstanding liquidity support," it said in a statement. The agency has yet to fully value the assets.

The Federation of Indonesian Private Domestic Banks (Perbanas) on Monday pleaded for the government to give banks more time to pay back their huge debts to Bank Indonesia. (rei/rid/aan)