Djojohadikusumos boost banking stance

Djojohadikusumos boost banking stance

JAKARTA (JP): Senior economist Sumitro Djojohadikusumo and his
family boosted their presence in the banking industry yesterday
by injecting Rp 40 billion in fresh funds to Bank Pelita, one of
the banks acquired by the family in the last two years.

"The fund injection reflected his undeterred commitment in
creating reliable and healthy financial intermediaries to help
medium-scale businesses," Sumitro told newsmen following a
ceremony marking the change of Bank Pelita's logo.

The introduction of the bank's new logo coincided with
Sumitro's 79 birthday, which he celebrated yesterday.

The fund injection raised the bank's paid-up capital to Rp 100
billion (US$43.47 million), from Rp 60 billion previously.

The Djojohadikusumo family formally took over Bank Pelita from
businessman Budi Puntaran in February last year. The takeover was
one of a series of acquisitions made last year by the family in
the banking industry.

The most significant acquisition carried out by the
Djojohadikusumos occurred last year when Hashim, Sumitro's son,
acquired nearly 20 percent of shares in the publicly listed Bank
Papan Sejahtera.

Hashim, previously known only as the president and a
shareholder of the publicly listed Semen Cibinong as well as
owner of PT Comexindo trading house, is currently the majority
shareholder in Bank Papan.

Bank Pelita is now 60 percent owned by Sumitro, 30 percent by
Hashim and 10 percent by businessman Okie Rahardi Lukita.

The Djojohadikusumos also have a controlling stake in Bank
Kredit Asia, in addition to 5 percent shares in Bank Universal
and another 4 percent in Bank Industri, which is also 8 percent
owned by President Soeharto's daughter Siti Hediyanti.

Hediyati, commonly called Titik, is the wife of Sumitro's
eldest son Prabowo Subianto.

Hashim, whose sister is married to Bank Indonesia Governor J.
Soedradjad Djiwandono, said that the country's banking industry
remains promising, even though "some people consider that the
industry has been overcrowded".

"The prospect remains promising as long as you have niches to
offer to customers and big capital to support the business," he
said.

He acknowledged that many banks suffered set-backs in their
financial performances in the last three years as the result of
fierce competition in the industry.

"We have to offer a specialty to be able to compete," he said,
adding that the speciality offered by Bank Pelita has enabled it
to survive difficult situations, which the bank encountered two
years ago.

Bank Pelita, which suffered a sharp decline in its profits in
1994, has continued to show a healthy performance since the new
shareholders increased the bank's capital to Rp 60 billion in
1995 from a mere Rp 10 billion, and changed the focus of its
services to trade financing.

The bank's pre-tax profits rose to Rp 2.75 billion in 1995
from Rp 417 million in 1994, with total assets rising sharply to
Rp 449.39 billion from Rp 140.42 billion.

The assets continued to increase to over Rp 550 billion as of
the end of March, while before-tax profits -- projected to reach
Rp 7 billion in 1996 -- totaled around Rp 2 billion in the
January-March period.

Asked about the government's tight monetary policy to cool
down the overheating economy, Sumitro, one of senior architects
of the Indonesian economy, said that such a policy is not only
important in bringing the macroeconomy onto the right track, but
also in securing public confidence in the banking industry.

"Restrictions in the banking industry are essential.
Otherwise, bankers would easily cheat their customers," he said.
(hen)