Central bank asks Yama Bank to raise capital

Central bank asks Yama Bank to raise capital

JAKARTA (JP): Bank Indonesia, the central bank, has ordered PT
Bank Yama to increase its capital before assisting PT Sira Tama
Agra Raya (STAR) take over the assets and liabilities of Bank
Summa.

Bank Summa is a private bank which is currently in the process
of liquidation.

A director of Bank Indonesia, Hendrobudianto, said over the
weekend that a capital increase was crucial to avoid violations
of the capital adequacy ratio (CAR) and legal lending limit.

STAR, which is owned by President Soeharto's eldest daughter,
Siti Hardiyanti Rukmana, will take Bank Summa's assets and
liabilities worth over around Rp 800 billion (US$ 372 million).

Hendro explained that Bank Yama will only be a "transit"
institution and a creditor to STAR because it will be assigned to
repay the liquidated bank's debts.

Based on media reports, Bank Yama needs to increase its
capital, which stood at Rp 58.45 billion ($27 million) as of last
December, by no less than Rp 34 billion if it wants to keep its
CAR to stay at eight percent.

The calculation is based on STAR's plan to transfer Rp 620
billion to Bank Yama. Of this Rp 379 billion will be used to pay
Bank Summa's liabilities to Bank Indonesia, Rp 58 billion to a
consortium of 13 banks, Rp 115 billion to Bank Summa's former
depositors and Rp 169 billion to a number of banks.

He said STAR will have to repay the deposits of Bank Summa's
former depositors after the completion of the takeover process
next month and its debts to other parties afterward.

Bank Summa, which was owned by the Soeryadjaya family, is
believed to hold several assets, including the Darmo Satellite
real estate complex in Surabaya, East Java, the Bandung Indah
Plaza, the largest shopping center in Bandung, West Java, and the
Sabang Hotel in Jakarta.

The Soeryadjaya family are the founders of PT Astra
International, Indonesia's largest automotive firm. (03)