BCA rating changed to 'not meaningful'

BCA rating changed to 'not meaningful'

MELBOURNE (Dow Jones): Standard & Poor's credit rating agency
changed yesterday its counterparty rating on Bank Central Asia or
BCA, to "not meaningful" from triple-Cpi in response to the bank
coming under the supervision of the Indonesian Banking
Restructuring Agency.

An NM, or not meaningful rating refers to situations where
considerable uncertainty exists as to the future financial
profile of the financial institution, S&P said.

The IBRA's action follows several days of deposit runs at BCA,
which necessitated the extension of government-liquidity credits
to the bank.

"The runs apparently stemmed from a loss of depositor
confidence following the resignation of president Soeharto, whose
family members hold a minority shareholding in BCA," S&P said.

"This situation underlines the significant deterioration in
depositor confidence and the heightened risk in Indonesian
banking," S&P noted.

BCA's equity is estimated to range between US$200 million -
being shareholders' funds at Dec. 31, 1997 - and US$300 million,
if media reports that the bank's majority shareholder has
recently injected US$100 million as equity are correct," S&P
said.

The Salim Group is BCA's majority shareholder.

"Following the takeover of BCA, the Indonesian government now
either owns, closely supervises, or manages more than 70 percent
of the Indonesian banking system. Wholly and majority-owned state
banks have more than 40 percent of banking system assets, while
the IBRA supervises or has management control over roughly 30
percent of industry assets," S&P noted.

BCA, Indonesia's second-largest bank, had assets of US$5.3
billion equivalent as of Dec. 31, according to S&P.

The IBRA, a government body set up in January to rehabilitate
banks, places banks under its oversight if it considers them as
possessing weakened financial profiles. It has wide-ranging
powers to restructure these banks.

"We consider the placement of a bank under the IBRA's
regulatory supervision as a result of the bank's financial
condition as tantamount to regulatory intervention. Thus, the
counterparty ratings for these banks are changed to NM," S&P
said.