BNI disposes of Rp 2t in bad loans

BNI shareholders granted an approval on Tuesday for the bank to dispose of some Rp 2 trillion (US$235 million) of its written- off loans, which are no longer collectible.

BNI director for risk management Bien Soebiantoro explained that the bank was expecting a 24.5 percent recovery after disposing of the loans by giving the debtors discounts or by selling their loan collateral in the form of fixed assets.

"We have to dispose of them, otherwise the recovery will be smaller. We have not decided which debtors should receive the facility because we are still undergoing a debt assessment," said Bien.

The bank's outstanding written-off loans were worth Rp 12.9 trillion as of last year.

Some 84 percent of the written-off loans or around Rp 8.4 trillion is owed by corporate creditors in hotel and petrochemical businesses, with the remaining Rp 1.6 trillion owed by creditors from small-and-medium businesses.

BNI shareholders also agreed to allocate 75 percent of the bank's 2003 net profit, or Rp 23.71 per share, for dividend payment.

The bank booked a net profit of Rp 420 billion last year, down from Rp 2.51 trillion in 2002 due to losses resulting from massive loan fraud worth Rp 1.7 trillion. -- JP