Bank owners offer assets worth Rp 177t

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)