BNI to issue up to $200m in bonds in May

The Jakarta Post, Jakarta

Publicly listed Bank Negara Indonesia (BNI) is set to issue subordinated bonds worth US$200 million in May or June to help strengthen its capital, the bank's president said.

"The bond offering is expected to raise BNI's capital adequacy ratio (CAR) from 18 percent at present to about 21 to 22 percent," BNI president Sigit Pramono announced on Tuesday.

Sigit also reaffirmed BNI's other corporate plans for this year following the bond issue, including the offering of new shares and the selling of up to 30 percent of its stakes under a secondary offering mechanism.

"The plan of the rights issue and the secondary offering are still being worked out," he said. "But they will hopefully be realized some time between July and December."

Sigit had earlier mentioned JP Morgan and Bahana Securities as the bank and the underwriters for the upcoming bond offering.

He said the bond issue was also intended to finance BNI's plan to expand its credit portfolio to Rp 6 trillion ($700 million) for this year, up 20 percent from last year's Rp 5 trillion.

BNI, the second largest bank in the country in terms of assets, has also set a revenue target of Rp 3 trillion for this year.

The bank's CAR and revenue for last year was severely affected by a Rp 1.7 trillion loan scandal, for which the bank had to set aside Rp 1.3 trillion in provision for potential losses.