Govt, Mandiri sign contract

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)