Bank Tamara seeking local merger partners

JAKARTA (JP): Publicly listed Bank Tamara is seeking to merge with local banks to meet the new paid-up capital requirement of Rp 1 trillion (about US$100 million) by the end of this year, a bank executive said here yesterday.

Bank Tamara's vice president Hendrik Suhardiman said merging with mid-sized local banks is the most likely way the bank will act to meet the new capital requirements.

"We are in serious discussion with four banks now and hopefully we can reach an agreement soon," he told journalists.

The four banks are middle sized institutions, but he declined to reveal names.

Bank Indonesia, the central bank, has ruled that local banks must increase their minimum paid-up capital to Rp 1 trillion by the end of 1998, Rp 2 trillion by the end of 1999 and Rp 3 trillion by the end of 2002.

Hendrik expects Bank Tamara and the four banks involved in the talks will meet the minimum capital requirement by the end of this year.

"When the merger process is completed, we believe that we can reach the minimum capital target of Rp 1 trillion by the end of this year," he said.

Bank Tamara had assets totaling Rp 3.08 trillion at the end of 1997 and had total equity of Rp 340 billion in February this year.

Hendrik said that a second alternative for Bank Tamara was to seek strengthened cooperation with the China Development Corporation (CDC) of Taiwan, which at present holds a 10 percent stake in the bank.

He said CDC, one of the biggest investment companies in Taiwan, has expressed an interest in increasing its stake in Bank Tamara, despite the present condition of the Indonesian banking sector.

"CDC is committed to increasing its presence here in Indonesia," he said.

Hendrik said that Bank Tamara had a net income of Rp 42.38 billion in 1997, up 23 percent from Rp 34.27 billion in 1996. He declined to reveal the bank's forecast income for this year. (aly)