Danamon denies violating rules

Danamon denies violating rules

JAKARTA: PT Bank Danamon, Indonesia's fifth-largest lender by assets, denied a report which said its purchase of a stake in a finance company in April 2004 breached a regulation on lending limits.

Indonesia's central bank said Danamon's purchase of a stake in PT Adira Dinamika Multi Finance led to a breach of regulations that limit how much a bank can lend to or invest in an affiliated party, Kompas has reported, citing a central bank letter.

"Bank Danamon's total capital has been growing in line with increasing profits," Jerry Ng, Danamon's vice president director, said in a statement. The management of Bank Danamon is "confident" that the bank has not breached any regulation, Ng said, without providing figures.

Bank Indonesia's regulation states that a bank may invest in an affiliated company using no more than 10 percent of its capital, the report said. Danamon, which had capital of Rp 7.8 trillion (US$810.3 million) in April last year, bought 75 percent of Adira for Rp 832 billion. -- Bloomberg