Banks disclose their CAR levels
JAKARTA (JP): In response to media reports citing nine banks listed to face liquidation this year, six banks disclosed their CAR levels to shrug off speculation against them.
The six publicly listed banks submitted an explanation of their CAR levels to the Jakarta Stock Exchange (JSX) on Thursday.
They were Bank Buana Indonesia, Bank Universal, Bank Inter Pacific, Bank Panin, Bank Internasional Indonesia (BII) and state Bank Negara Indonesia (BNI), according to the news website, Satunet.com
Under a Bank Indonesia regulation the banks must have a minimum CAR level of eight percent to escape liquidation.
CAR measures a bank's capital against its risked weighted assets; the ratio is used to measure its health.
Local media, including The Jakarta Post, published last week a list of nine banks that face the risk of liquidation, as they showed CAR levels below the minimum required.
Bank Indonesia, however, denied it had disclosed a list containing such information.
The central bank's deputy governor, Miranda Goeltom, had said earlier that nine banks face closure if they failed to improve their CAR levels by the end of this year.
According to the list, the nine banks included BII, Bank Universal, Bank IFI, Bank Tabungan Pensiunan Nasional, Bank Artha Media, Bank Swaguna, Bank Prima Express and Bank Tugu.
Of the list, two - BII and Bank Universal - responded to the reports by disclosing their CAR position to the JSX.
The other four banks, BNI, Bank Buana, Bank Panin, and Bank Inter Pacific reported that their CAR level stood well above the minimum level of 8 percent.
BNI said its CAR level, as of May this year, stood at 14.09 percent.
Bank Buana said it had "no comment" on the media report, other than disclosing that its CAR level stood at 21.89 percent.
Whereas, Bank Panin director Ahmad Hidayat assured the public by claiming his bank's CAR level stood at a sizable 39.82 percent.
Bank Inter Pacific reported a CAR level of 11.55 percent.
Meanwhile, Bank Universal said in its explanation to JSX, its CAR level stood at 4.21 percent, as of May 31.
This level is still in line with the current minimum requirement of 4 percent. But, as of next year, the bank must show a CAR level of at least 8 percent.
Bank Universal said it had proposed a "financial initiative" to prop up the CAR level, but awaited Bank Indonesia's approval.
The bank had earlier attempted a merger with the larger Bank Danamon yet the plan came to nothing, as the two failed to reach an agreement.
The financially troubled BII claimed a CAR level of 9.13 percent as of March this year.
However, the bank's CAR level is likely to plunge due to its massive non-performing loans.
About half of BII's loans have been extended to affiliated parties under its parent company, the Sinar Mas Group.
The loans amount to some US$1.2 billion, of which $1 billion is subject to a debt standstill declaration by Sinar Mas. (bkm)