BDNI gets long-term rating of BB-plus

BDNI gets long-term rating of BB-plus

LONDON (Reuter): IBCA, Europe's international credit rating agency, yesterday assigned an Individual rating of C, a Long-term rating of BB+ and a Short-term rating of B to Bank Dagang Nasional Indonesia (BDNI).

The rating agency said that BDNI, Indonesia's eleventh largest bank and fourth largest private commercial bank, with a 4 percent market share, has a solid middle market banking franchise and is also active in credit cards, treasury services and capital markets activities.

"The bank's ratings reflect this, along with its favorable operating performance trends and above average asset quality over the past few years." the agency said.

Following the completion of a rights issue in the first quarter of 1997, the bank appeared to be well capitalized, with a CAR ratio (BIS - total capital equivalent) of 12.2 percent, it said

Although the recent regional currency crisis poses a modest degree of risk to asset quality, BDNI is a conservatively managed bank with good performance, adequate capitalization, and favorable long-term prospects.

The Long-term rating is partly influenced by sovereign factors. Indonesia has a very good record of economic management over the past decade but the effects of recent currency volatility may have a detrimental impact on the Indonesian economy and the full impact to the banking sector cannot yet be determined.