Credit Lyonnais appointed BNI financial advisor

JAKARTA (JP): Publicly listed state Bank Negara Indonesia (BNI) announced on Tuesday that it had appointed Credit Lyonnais Securities Asia Ltd. as financial advisor to help turn around its money-losing operation.

BNI president Saefuddin Hasan said that Credit Lyonnais would help the bank in meeting several targets set in its business plan agreed upon with the government as a precondition to its recapitalization.

He said that Boston Consulting Group and IBM would also help the bank meet the targets.

Saefuddin said the government would complete the recapitalization of BNI only if it could meet the targets set in the business plan.

BNI needs some Rp 61.8 trillion (US$7.8 billion) in recapitalization funds to help boost its capital adequacy ratio (CAR) to the minimum 4 percent level.

The bank completed its first phase recapitalization program on April 7, in which the government issued bonds worth around Rp 30 trillion to the bank.

BNI is expected to complete the recapitalization program on June 30.

BNI has already transferred a large amount of bad debt to the Indonesian Bank Restructuring Agency, which is has the task to restructure the loans.

Saefuddin said the bank had been targeted to reduce the amount of its nonperforming loans from 37 percent at the end of 1999 to 12.5 percent in 2001, 8.9 percent in 2002 and 7.5 percent in 2003.

"Our main goal is to make BNI a healthy bank and to help it become competitive in the long term," said Philip Braun of Credit Lyonnais Asia Ltd.

"We'll try to clean up the balance sheet through asset rehabilitation," he said, adding that its current contract with the bank was set for 18 months, but he estimated the job might take two to three years. (rei)