Bank Papan gets Rp 9990.36b in liquidity credits

Bank Papan gets Rp 9990.36b in liquidity credits

JAKARTA (JP): Publicly listed Bank Papan Sejahtera (BPS) said
yesterday that it received liquidity credits of Rp 990.36 billion
(US$90 million) from Bank Indonesia last year, or about 45
percent of the company's total assets of Rp 2.2 trillion in the
same period.

One of the bank's commissioners, Al Njoo, said yesterday that
Bank Papan had promised Bank Indonesia to pay the credits this
year.

"The first installment will be paid at the end of June and the
second at the end of December 1998," told the media after a
shareholders meeting here yesterday, which among other things
approved his appointment to commissioner from his previous job as
president.

He was replaced by JRM Winarendra.

Njoo, however, did not disclose the outstanding credits
provided by the central bank as of this month or how much of the
loan Bank Papan had repaid.

Bank Papan, controlled by Hashim Djojohadikusumo's Tirtamas
Group, is among 32 private commercial and provincial development
banks currently under the supervision of the Indonesian Banking
Restructuring Agency (IBRA) due to their worsening financial
performance.

These banks, according to IBRA, have obtained liquidity
credits from the central bank equivalent to more than 200 percent
of their capital and have a capital adequacy ratio of less than 5
percent.

Al Njoo also declined to mention the financial sources from
which the money would come to pay the central bank's credits but
said that it was currently seeking to merge with several local
private banks to boost its capital.

He said that talks on a merger were still underway and are
expected to be concluded within two months.

"It is too early for us to mention the names of the other
banks," he said.

He said that if the bank signed an agreement to merge, it
would also seek approval from IBRA, which is currently
supervising it, as well as from the Ministry of Finance.

But he said that merging with other private banks was the most
feasible solution for Bank Papan to boost its capital and to face
the tight competition in the banking industry in the years ahead.

He said the country would need around 20 strong banks with
total assets ranging between Rp 20 trillion and Rp 30 trillion to
survive the future cut-throat competition.

"That is why Bank Papan will have to merge with other banks,"
he said.

He said the bank's previous plan to merge with Bank Kredit
Asia and Bank Pelita had been dropped as they had both been
suspended by Bank Indonesia.

Bank Papan, which had total assets worth Rp 2.02 trillion last
year, recorded a net loss of Rp 40.41 billion in 1997. The bank
booked a net profit of Rp 8.76 billion the previous year. (aly)