Govt, Mandiri sign contract

JAKARTA (JP): The Ministry of Finance and state Bank Mandiri signed on Saturday a management contract on the bank's financial and privatization targets for 2000 and 2001.

The ministry announced that under the agreement, the bank has to raise its capital adequacy ratio (CAR) to above 4 percent and its return on equity (ROE) ratio to above 15 percent this year.

In 2001, the bank has to increase its CAR to above 8 percent and its ROE to above 28 percent, the ministry said.

It said that under the recapitalization agreement signed last year, the government had injected Rp 178 trillion (US$23.7 billion) worth of bonds to recapitalize the bank.

However, a due diligence on the bank by an independent auditor found that the recapitalization funds needed by the bank had decreased to Rp 175.34 trillion as of Dec. 31, 1999, following smaller losses than expected recorded by the bank last year.

The bank will return the remaining Rp 2.657 billion in bonds to the government, the ministry said.

Bank Mandiri was formed last year out of a merger of four state banks -- Bank Ekspor Impor Indonesia (Bank Exim), Bank Bumi Daya (BBD), Bank Dagang Negara (BDN) and Bank Pembangunan Indonesia (Bapindo). (jsk)