Four large banks agree to help Bank Lippo
Four large banks agree to help Bank Lippo
JAKARTA (JP): Bank Danamon, Bank Bali, Bank Internasional Indonesia and Bank Central Asia have reached an initial agreement to help Bank Lippo with its alleged financial problems, reliable banking industry sources said yesterday.
The sources, who spoke on condition of anonymity, told The Jakarta Post that the four major banks planned to inject fresh funds into Bank Lippo, which was reported last week to be in some financial difficulties. The sources said the plan had been approved by Bank Indonesia, the central bank.
No representatives of Bank Lippo or of the four other banks were available yesterday for comment on fund-injection plan.
The sources told The Post that the bailout agreement had been reached on the condition that the funds would be used mainly to the strengthen Bank Lippo's cash flow.
"The four banks did not want the funds to be used to back up Lippo Land, currently said to be in difficulties due to the poor marketing of its housing and office building megaprojects," one of the sources said.
The amount of funds to be injected into Bank Lippo, one of the largest banks in Indonesia, is not known.
Roy E. Tirtadji, a Bank Lippo commissioner, acknowledged to journalists early this week that the bank suffered a clearing loss on Thursday last week.
However, Roy played down the significance of the incident, saying that clearing losses were normal and could happen at any bank.
"A clearing loss is normal in banking activities," Roy said.
Clearing losses occur when a bank fails to meet its financial obligations on a given day.
Bank Lippo is one of the healthiest private banks in the country, with assets totaling Rp 7.6 trillion (US$3.4 billion) as of June 30. On the same date, Bank Lippo's accounts with Bank Indonesia and other banks totaled over Rp 117 billion, while the amount of funds placed in promissory notes reached Rp 696 billion.
The bank's pre-tax profit was Rp 65.28 billion in the first semester of this year, as compared with Rp 49.78 billion in the same period of last year.
Roy said that the bank's non-performing loans were only 0.3 percent of its outstanding loans of Rp 4.4 trillion. He added that the bank's loan-to-deposit ratio remained at the sound level of 80 percent.
"The remaining 20 percent of the productive assets are invested in liquid instruments, such as promissory notes and commercial paper," he said.
Projects
Analysts linked the bank's clearing loss to the poor marketing of Lippo Land's huge housing and office building projects in Cikarang, Bekasi and Karawaci (Tangerang), all in West Java.
But Roy denied this, saying that the Lippo Group has other financing sources for the property projects.
He said that most of the housing and office building units in the Karawaci and Cikarang townships had already been sold.
Lippo Land is now constructing hundreds of luxury houses, three high-rise office buildings, two apartment towers and a 200,000-square meter shopping center in Karawaci, about 30 kilometers west of Jakarta.
A modern hospital and schools have already been opened in the Karawaci township.
Lippo Land, a publicly-listed property company, is also developing similar projects in Cikarang, about 35 kilometers east of Jakarta. (04/hen)