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