Govt expected to divest stake in Bank Niaga in May
Govt expected to divest stake in Bank Niaga in May
JAKARTA (JP): The government is expected to complete the sale
of more than 50 percent of its stake in the publicly listed Bank
Niaga in May, according to the bank's president Peter B. Stock.
Stock said on Wednesday that the financial and legal
consultants for the sale process had been appointed, and due
diligence process by potential investors would be conducted in
April.
"In May 2001 we expect to complete the final transaction," he
told the House of Representatives commission IX on state budget
and finance at a hearing.
The government plans to divest its shares in Bank Niaga as
well as in the publicly listed Bank Central Asia (BCA) in the
first semester of this year.
The government was supposed to seek approval for the
divestment program from the House commission IX on Monday, but it
was delayed until next Tuesday because legislators were busy with
the investigation of two financial scandals allegedly linked to
President Abdurrahman Wahid.
The sale of BCA and Bank Niaga was supposed to be completed at
the end of last year, but the House recommended the government
delay it due to unfavorable market conditions.
The International Monetary Fund was disappointed with the
delay, prompting the Fund to also delay the disbursement of its
US$400 million loan tranche to Indonesia. The divestment program
was part of the country's major economic reform program promised
by the government to the IMF, which is providing the current
administration with some $5 billion in bailout funds.
The government via the Indonesian Bank Restructuring Agency
(IBRA) nationalized Bank Niaga and BCA after the two banks were
badly hit by the Asian financial crisis that started in the
middle of 1997.
IBRA is expected to raise around Rp 3.6 trillion (US$383
million) from the sale of the two banks to contribute to its
target to raise some Rp 27 trillion in cash to help finance the
2001 state budget deficit.
Elsewhere, Stock said that Bank Niaga's capital adequacy ratio
per end of December 2000 stood at 21 percent, while non-
performing loans (NPLs) at 27 percent.
The government requires that all banks must have a minimum CAR
level of 8 percent and NPL level of not more than 5 percent by
the end of this year or risk closure.
Stock said that net profit in 2000 jumped to Rp 64 billion
from around Rp 5.69 billion in 1999.
He said that total assets as of end of last year was Rp 18.3
trillion, while lending totaled Rp 6.2 trillion.
He added that third party funds last year totaled Rp 14.4
trillion, and projected an increase by Rp 1.7 trillion in 2001.
Speaking at the same occasion, BCA president Johan Emir
Setijoso said that BCA's CAR level as of end of last year stood
at 40.05 percent, while NPL was at 2.1 percent.
He said that total assets reached Rp 95.47 trillion including
the government's bonds worth Rp 59.6 trillion. Total lending was
only Rp 8.28 trillion.
He said that third party funds totaled Rp 85.95 trillion.
BCA said in a written statement that pretax profit last year
jumped to Rp 1.7 trillion from Rp 230 billion in 1999.
The government had sold 22.5 percent of its stake in BCA in
May last year. (rei)