Bank Universal gears up for recapitalization

JAKARTA (JP): Bank Universal is preparing a rights share issue to partly finance its recapitalization program, the subsidiary of PT Astra International announced on Monday.

"We have also submitted a business plan to Bank Indonesia (the central bank) to meet one of the requirements for joining the government-sponsored recapitalization program," Universal's president Stephen Z. Satyahadi said in a statement.

Stephen said his bank, classified in the B category for banks with a capital adequacy ratio (CAR) between minus 25 percent and 4 percent, was buoyed by the significant expansion of its client base last year.

"The number of our deposit and savings accounts increased to 260,000 last year from only 60,300 in 1997, and the amount of third-party deposits we raised increased to Rp 7.6 trillion from Rp 2.9 trillion."

Separately on Monday, Astra International CEO Rini Suwandi said the company set aside Rp 477 billion for Bank Universal's recapitalization.

Rini told reporters the group was strongly committed to building the bank into a strong, major institution.

Stephen added the bank would continue to focus its attention on middle-income customers and medium-scale businesses.

As part of the plan to recapitalize banks, the government will put up 80 percent of the recapitalization funds, while a bank's shareholders will be required to come up with the rest to raise the CAR to at least 4 percent.

The capital-adequacy ratio is the ratio between equity capital and risk-weighted assets.

Meanwhile, Erik Vesavel of Bank Brussels Lambert announced on Monday his bank's readiness to buy the rights shares to be issued by Bank Mashill in March to partly fund its recapitalization program.

"We will take up the rights shares in proportion to our shareholding in Bank Mashill," Vesavel said in a statement. (vin)