Bank Umum Servitia delays merger plan

Bank Umum Servitia delays merger plan

JAKARTA (JP): Publicly listed Bank Umum Servitia (BUS) said
yesterday it had delayed its plan to merge with three other
medium-sized banks.

The bank said in a statement that the delay was decided to
enable each bank to consolidate their operations before entering
the merger.

The bank announced in April that it would merge with Bank
Central Dagang (BCD), Bank Hastin and Bank Prima Express this
year to enable the four banks to meet the minimum capital
requirement set by Bank Indonesia.

"The merger plan will be discussed again in the next nine
months," the bank's statement said. It is thought the other three
banks are still going to proceed with the merger.

BUS, which is currently under the supervision of the
Indonesian Banking Restructuring Agency (IBRA), reported that
its pretax profit plunged to Rp 1.52 billion in the first half of
this year from Rp 15.20 billion in the corresponding period of
last year.

The statement said the decline in profit was largely due to a
significant increase in the bank's loan loss provision to Rp
106.99 billion in 1998 as compared to just Rp 26.1 billion the
previous year.

"We had to increase the nonperforming loan provision to
anticipate the increase in nonperforming loans this year," it
said.

Total public funds collected by BUS in the first half of this
year rose to Rp 2.65 trillion compared to Rp 1.17 trillion in the
same period last year.

The bank's credits rose to Rp 2.38 trillion in the first
semester from Rp 1.25 trillion in the corresponding period last
year.

The bank will also increase its paid-up capital to Rp 500
billion by the end of this year from Rp 100 billion currently
bringing its capital adequacy ratio (CAR) to 20 percent, higher
than the four percent set by the government, it said.

The statement said the bank secured the Rp 400 billion in
fresh funds from a recent rights issue to boost its capital.
(aly)