Despite Marriot bombing, investors still interested in RI banks
The Jakarta Post, Jakarta
The government should go ahead with its plans to sell more local banks this year and next year as foreign investors still have a keen interest in the sell-off program despite the recent Marriot hotel bombing, analysts say.
They said investors continued to have confidence in the resilience of the country's economy as they had seen that the bombing had a limited economic impact.
This was reflected in the quick recovery of local stocks and the rupiah, they said.
"Based on that, I do not see why foreign investors should be reluctant to participate in the bank sell-off program," a banking sector observer at a state-owned bank told The Jakarta Post over the weekend.
"Aside from the fact that the bombing has caused only a small impact, the assets offered by the government are competitive in terms of value compared with those of the same caliber in other countries," he added.
The government plans to sell more banks in a bid to raise cash for the budget and to lure credible investors into the sector, thus, it is hoped, reviving public confidence in the sector.
The banks slated for sale include Bank Rakyat Indonesia in October or November, Bank Lippo (September 2003), Bank Internasional Indonesia (September or October 2003), Bank Permata (2004), Bank Negara Indonesia (2004) and Bank Tabungan Negara (2004).
In the last two years, the government sold majority stakes in Bank Danamon, Bank Niaga and Bank Central Asia (BCA). And only recently, in what is considered as the biggest success of the program, it sold a 30 percent stake in Bank Mandiri through an initial public offering (IPO).
The momentum was recently disrupted by the JWC Marriott Hotel bombing on Aug. 5, which killed 12 people. This has prompted suggestions that the government should temporarily put on hold the bank sell-off program.
Key facts about the banks that are up for sale
1. BRI: Now one of the country's largest banks in the area of micro financing, BRI had total assets of Rp 85.6 trillion as of March. A 30 percent stake in the state bank will be sold via an IPO mechanism.
2. LIPPO: This bank is 54 percent owned by the government, with this entire stake being put up for sale. As of May this year, it had total asset of Rp 22.5 trillion, 379 branch offices nationwide and around 6,000 employees.
3. BII: The government holds 93.7 percent stake in this bank, with at least a 51 percent stake expected to be put on the block. It has 255 branch offices and employs more than 7,000 staff. Its assets total Rp 37.9 trillion.
4. PERMATA: Permata is the result of a merger of five banks -- Bank Universal, Bank Bali, Bank Patriot, Bank Artamedia and Bank Prima Express. It has assets of Rp 29 trillion and is now 97.67 percent owned by the government, while the investing public holds the remaining 2.33 percent.
5. BNI: Another heavyweight state bank, BNI currently has total assets of Rp 125.6 trillion, employs around 14,598 people and has close to 800 branch offices both in Indonesia and overseas.