BUN excluded from list in Nusamba's merger plan

JAKARTA (JP): The Nusamba Group has removed publicly listed Bank Umum Nasional (BUN) from its bank merger program, a group executive said yesterday.

BUM's removal means only Nusamba Group's three other banks will merge. There are Bank Bukopin, Bank Tugu and publicly listed Bank Duta.

Bank Duta president Muchtar Mandala said BUN was not being included in the merger because its management had been put under the control of the Indonesian Banking Restructuring Agency (IBRA).

BUN and the three other banks under the Nusamba Group signed a memorandum of understanding to merge in January this year.

But on April 5, BUN's management was taken over by the government through IBRA as part of the government's efforts to improve the country's ailing banking system and regain the confidence of the domestic and global markets.

Mucthar said that the consolidation of the three banks would create a new bank, Bank Palapa, with total assets of about Rp 13 trillion (US$1.62 billion) and paid-up capital of about Rp 750 billion.

"Hopefully the consolidation process will be finalized by early July," he said.

He said that Nusamba Group did not have any problems with the merger process of the three banks.

Nusamba Group, owned by President Soeharto's four foundations, is chaired by timber baron Muhammad "Bob" Hasan, who is concurrently the chief commissioner of BUN, Bukopin and Bank Duta. Hasan is also minister of trade and industry.

Muchtar also indicated that Bank Palapa might also invite foreign investors to buy some of the bank's shares to meet the new capital requirement.

The government has said that commercial banks are required to have a minimum capital of Rp 1 trillion by the end of 1998, Rp 2 trillion by 2000 and Rp 3 trillion by 2003.

However, under a recently announced regulation, sound banks -- those which have cleared their nonperforming loans -- will be allowed to operate with a paid up capital of Rp 250 billion by the end of this year.

Muchtar said Bank Palapa might well have problems meeting the capital requirement of Rp 2 trillion in 2000 and Rp 3 trillion in 2003.

"Due to such difficulties, foreign investors are also welcome," he said without elaborating.

Muchtar said yesterday that despite the crisis, Bank Duta recorded an 8.8 percent increase in net profit to Rp 50.6 billion in 1997 from Rp 46.2 billion in 1996.

"We could meet our financial target despite the severe monetary crisis," he said after holding the company's annual shareholders meeting yesterday.

The bank's total assets rose to Rp 6.88 trillion in 1997 from Rp 5.26 trillion in 1996.

He said that Bank Duta, which had 85 branches and 110 automated teller machines nationwide at the end of 1997, raised public funds worth Rp 4.20 trillion in 1997, up from Rp 3.08 trillion in 1996.

He said that the bank had allocated total credits worth Rp 4.80 trillion in 1997, up from Rp 3.11 trillion in 1996.

Bank Bukopin had total assets worth Rp 5.1 trillion at the end of last year, a profit before tax of Rp 50.5 billion, and equity of Rp 265.8 billion.

Bank Tugu's total assets were Rp 330.2 billion, its equity Rp 71.2 billion and its before-tax profit Rp 71.2 billion last year. (aly)