Four banks plan to merge

JAKARTA (JP): The publicly listed Bank Mashill Utama, Bank Jayabank International, Bank Artamedia Indonesia and Bank Ciputra announced yesterday their intention to merge to enable them to meet new capital requirements.

Bank Mashil said that under an agreement signed yesterday it would become the surviving bank in the merger, with combined assets of Rp 3.6 trillion (US$240 million) and total equity of Rp 563 billion.

Early this year the government introduced a regulation that commercial banks are required to have minimum capital of Rp 1 trillion by the end of this year, Rp 2 trillion by the end of 2000 and Rp 3 trillion by 2003.

However, under a recently issued regulation, sound banks -- those which have cleared their nonperforming loans -- will be allowed to operate with paid-up capital of Rp 250 billion by the end of this year.

The statement said the merger agreement was still awaiting approval from the Capital Market Supervisory Agency (Bapepam) and the central bank, Bank Indonesia. (aly)