BCA forecasts 2001 pre-tax profit of Rp 1.84 trillion

JAKARTA (JP): Publicly listed Bank Central Asia (BCA) said on Thursday it was projecting this year's pre-tax profit to hit Rp 1.84 trillion (about US$174 million), or slightly up on last year's Rp 1.60 trillion.

BCA president Setijoso said here on Thursday that to achieve the target, the bank would continue expanding its technology network and banking products.

"On the credit side, BCA will prioritize prudential banking principles by emphasizing the trade, services, farming, and export-oriented manufacturing sectors," Setijoso told the press following an extraordinary meeting of the bank's shareholders.

BCA, Indonesia's largest private bank, operates 794 branch offices, 2,072 ATMs, and has almost 8 million accounts.

Setijoso further said that BCA's capital adequacy ratio (CAR) for this year was set to increase to 37.93 percent from 33.84 percent the year before.

At the same time, BCA also planned to extend loans worth about Rp 13.2 trillion this year as against Rp 8.2 trillion in the previous year.

For last year's financial results, BCA reported net interest income of Rp 2.27 trillion, which was a turnaround from the previous year's net interest loss of Rp 4.21 trillion.

The bank extended loans of Rp 8.2 trillion in 2000, surging up from Rp 4.24 trillion in 1999.

"The loans channeled throughout 2000, also included those the bank had bought from IBRA (the Indonesian Bank Restructuring Agency), either through tenders or directly," Setijoso explained.

During the meeting, shareholders also approved BCA's quasi- reorganization move or accounting procedure adjustment to eliminate deficits from its balance sheet.

Under the new accounting procedure, the bank injected additional capital of about Rp 29.5 trillion to offset the bank's loss carried forward of Rp 25.5 trillion.

The additional capital was taken from the bank's retained earnings, and the capital gain booked during the bank's public offering early last year.

The quasi-reorganization, however, caused a significant drop in the bank's income and lowered total assets and liabilities by Rp 17.8 billion.

"The implementing of the quasi-reorganization, however, does not alter the share ownership of either the minority or majority owners," Setijoso added.

BCA is 72 percent owned by the government, 22.5 percent by the investing public, with the remaining shares being held by the old owner which is the Salim Group.

The Salim Group had to surrender most of its stake as assets pledged to IBRA, after the agency took over its unpaid loans in several local banks.

The shareholders also approved management plans to split the bank's stock in a bid to boost its liquidity in the stock market.

The move, for which no date has been decided yet, would split BCA's nominal share price from Rp 500 to Rp 250, allowing existing shareholders to receive a new share for every old share they hold.

The share split will also double the number of the bank's total shares to 5.89 billion.

"The reason behind the stock split is to increase liquidity of BCA shares, and allow the bank to enter the main trading board at the Jakarta Stock Exchange (JSX)," Soetijoso said.

He said that by entering the JSX's main trading board the bank would attract the interest of potential long-term investors.

The government plans to divest more of its stake in BCA sometime in mid-2001.

Initially, the divestment was set for late last year, but legislators blocked the move on fears that unfavorable market conditions would cause the bank to be undervalued. (bkm)