Belgian banks told to boost RI provisions

Belgian banks told to boost RI provisions

BRUSSELS (Dow Jones): Belgium's Banking and Finance Commission asked Belgian banks in June to add around BEF6 billion to provisions for potential losses in Indonesia, Belgian financial newspaper De Financieel Economische Tijd reported yesterday.

The additional provisions would mean that the banks would now have to make provisions for 20 percent of their outstanding loans in Indonesia, the newspaper said.

The paper reported the Banking Commission told Belgian banks they have to be alert about Asian risks, even if the amount of their exposure has decreased.

Banking Commission officials weren't immediately available for comment on the report yesterday.

Last year, according to banking analysts at KBC Securities, a unit of banking group KBC Bank NV, the three leading Belgian banks provisioned a combined BEF2.6 billion for potential losses on all southeast Asian markets, including Indonesia.

They said KBC's provisions alone were BEF750 million, while Banque Bruxelles Lambert SA set aside BEF1.0 billion, and Generale Bank NV provisioned BEF850 million.

Officials at Belgium's leading banks weren't immediately available for comment on the report.

KBC Securities analysts estimated total Asian loan exposure of internationally active Belgian banks at BEF32 billion as of May 1998, down from BEF40 billion in December 1997 and BEF52 billion in June 1997.

Generale Bank, now a unit of Belgo-Dutch financial group Fortis , has the largest overall Asian exposure among the Belgian lenders, although it is concentrated in Hong Kong.