Govt to sell part of stakes in Mandiri, BRI

Govt to sell part of stakes in Mandiri, BRI Bloomberg Jakarta

The government plans to sell a part of its stake in PT Bank Mandiri, the nation's largest lender, and its smaller rival PT Bank Rakyat Indonesia (BRI) to help cut its budget deficit, a minister said on Wednesday.

The government will sell minority holdings in the banks because it still wants to retain control of the lenders, Coordinating Minister for the Economy Aburizal Bakrie told reporters. The share sale will take place "later this year," he said.

Indonesia has been selling stakes in banks and other companies acquired after the 1997 Asian financial crisis to trim its budget deficit, forecast to reach Rp 24.9 trillion (US$2.4 billion) this year, and recoup part of the more than Rp 450 trillion it spent bailing out banks.

The government raised Rp 2.19 trillion selling its 5.02 percent stake in PT Bank Central Asia (BCA) last week.

The rupiah and stocks have slumped this year as oil prices soared, sparking concern about the state of the government's finances.

The Jakarta Composite Index on Aug. 29 surrendered all the year's 18 percent gain. The index has since recovered to rise 3.7 percent for the year.

The government also plans to sell a 7.1 percent stake in PT Perusahaan Gas Negara, the state gas distributor, later this year, Aburizal said.

Last year, the Indonesian government sold a 1.48 percent stake in BCA. It also sold a 7.85 percent stake in PT Bank Danamon, 5.65 percent of PT Bank Niaga and 1.99 percent of PT Bank Internasional Indonesia (BII).

The government raised a combined Rp 1.55 trillion from the stake sales.

Bank Mandiri, which expects profit to fall this year on higher loan-loss provisions from Rp 5.26 trillion last year, is 69 percent owned by the government and BRI, the nation's fourth largest lender, is 59 percent owned.