BNI defies shaky market with plan to go public

JAKARTA (JP): State-owned Bank Negara Indonesia (BNI) 1946 will go ahead with its initial plan to float shares on the local capital market later this year despite the jitters felt after last week's rioting.

The bank's president, Widigdo Sukarman, said yesterday that his bank is determined to go public even though local market conditions are currently not that supportive for new issues.

"Being a state-owned bank, BNI has distinct strengths... and insya Allah (God willing), we will be able to go public later this year," Widigdo said at a press conference at the Ministry of Finance.

Widigdo met with Minister of Finance Mar'ie Muhammad to report the developments of his bank's preparations to go public.

"The minister stressed that BNI's going public will be conducted according to schedule, in the forth quarter of 1996," Widigdo said.

In its preparations to go public, BNI is being assisted by its financial advisor JP Morgan and lead-underwriter, state-owned PT Danareksa Securities.

Unlike its predecessors PT Indosat, PT Telkom and PT Tambang Timah, which conducted dual listings of their shares on both local and foreign markets, BNI will float its shares only on local markets.

"Listing in Jakarta (on the Jakarta Stock Exchange) is enough... and foreign investors will still be able to buy up to 49 percent of our shares," Widigdo said.

Analysts said that considering the current political situations, the JSX is not likely to be supportive of new issues this year.

Riots

The JSX's composite index continued to decrease from its highest level of 630 points on April 24 to 561 last Friday. And yesterday, following the riots in the city on Saturday and Sunday, the index dived to 540.74.

Widigdo, however, contended that the drop is only temporary, adding that the long-term investment outlook in Indonesia is still quite good.

He said the recent drops in the JSX's composite index have been driven by the decline of the Dow Jones index of stocks on the New York Stock Exchange.

"It's because of the summer, when trading is normally light as people are taking their holidays... You might not agree with me, but this is the fact," Widigdo said.

BNI, which was established on July 5, 1946, is now the largest bank in the country. The bank booked total assets of Rp 31.81 trillion (US$13.53 billion) as of March this year, with outstanding loans amounting to Rp 20.70 trillion and deposits reaching Rp 18.01 trillion.

The pre-tax profits in the January-March period totaled Rp 112.6 billion. The amount of problem loans was much higher, reaching about 4 percent of the outstanding loans in the same period, with bad (totally unpaid) loans at 0.58 percent.

At present, the bank operates 485 branches, mostly in Java, Sumatra and Bali. In addition, it has 300 automated teller machines in Jakarta and other major cities in Java.

The bank's pretax profit, which rose by 26.1 percent to Rp 410.1 billion in 1995, is projected to reach Rp 445 billion this year. (rid)