BCA set to offer up to 30 percent of shares in May

BCA set to offer up to 30 percent of shares in May

JAKARTA (JP): The giant Bank Central Asia (BCA) will offer up
to 882.2 million shares or 30 percent of its total equity through
an initial public offering (IPO) on May 19-23.

The IPO price will be set between Rp 1,350 (US$0.17) and Rp
1,750 per share.

"All the shares being offered are owned by the Indonesian Bank
Restructuring Agency (IBRA)," said BCA president Djohan Emir
Setijoso.

IBRA owns 92.8 percent of BCA after the government injected a
massive liquidity support in 1998 to bail out the bank which was
suffering from a run on deposits and a worsening economic
situation. The remaining 7.2 percent is held by the founding
shareholders, the Salim family.

The BCA IPO will be part of IBRA's divestment program to raise
some Rp 18.9 trillion between April-December to help finance the
2000 state budget.

A domestic road show is scheduled for April 10-13, and an
international road show on April 26-May 9 covering Singapore,
Hong Kong, New York, London, and Edinburgh.

The exact IPO price would be decided on May 9 and listings on
the Jakarta Stock Exchange and the Surabaya Stock Exchange will
be made at the end of May.

The lead underwriters of the IPO are PT Bahana Securities and
PT Danareksa Sekuritas.

BCA, formed in 1957, was the country's largest private bank.
The bank was controlled by the Salim Group, Indonesia's largest
conglomerate, and the family of former president Soeharto.
Salim now owns 7.2 percent of BCA.

During the social unrest that occurred before and shortly
after the fall of Soeharto in May 1998, Bank BCA suffered a
massive run on its deposits and some 149 branches were destroyed
during mass rioting.

IBRA nationalized the bank on May 28, 1998. Management changes
and a recapitalization program were initiated the following year.

"Under the new management, BCA has recorded a significant
increase in net profit," Djohan said.

He pointed out that net profit in 1999 was Rp 641.29 billion
compared to a loss of Rp 28.40 trillion in 1998.

He added that the bank's capital adequacy ratio (CAR) level
soared from 16.54 percent in May 1999 to 41.95 percent at the end
of last year.

Djohan said that total assets at year end 1999 were Rp 96.45
trillion, one of the largest in the industry.

He said that total deposits last year were around Rp 87
trillion, also one of the largest in the industry.

BCA has 795 branches at home and two overseas and operates
1,858 automatic teller machines (ATMs).

Djohan said that the bank planned to increase the number of
ATMs by around 200 units this year.

Djohan said that all of the IPO proceeds would go to IBRA to
help finance the state budget.

He said that BCA had no immediate plans to offer new shares
because the bank's current capital base of more than Rp 5
trillion was "quite strong" to support its lending program.

But Djohan added that once the country's economy recovered
from its economic crisis, the bank would consider offering a
rights issue.

Djohan said that BCA had resumed lending in August 1999 to
retail customers and in January to corporate customer.

He said that the bank's total lending this year was projected
to reach Rp 7.8 trillion.

He said that the bank's corporate credit policy would be
directed to various economic sectors, but lending on each sector
would be limited to 20 percent of total lending portfolio.

He added that lending to the property sector would be limited
to 10 percent.

He said that the bank would develop its consumer banking and
retail lending operation with Bank of America, while
PriceWaterhouseCoopers would help design its risk management
system.

Djohan and three other directors at Bank BCA are former
bankers at state banks. This has raised concern that their
management style would be bureaucratic, thus hampering the bank's
future development.

But Djohan dismissed the concerns. He pointed out that he
himself had long experience running a joint venture bank and the
overseas branch of state Bank BRI. He added that his two other
colleagues also had banking experience overseas.

"Also, we have not changed middle management. We think that
they're the best people in the industry." Djohan said.

Bank BCA plans to launch internet banking in the third quarter
of this year, expecting to lure some 5 percent of its eight
million individual customers. The service will be offered to
corporate customers in the first quarter of 2001.(rei)