BNI defies shaky market with plan to go public
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)