IBRA banks' key indicators improve

The Jakarta Post, Jakarta

Key financial indicators of banks under the control of the Indonesian Bank Restructuring Agency (IBRA) improved in the third quarter of this year compared to the previous quarter, according to State Minister for State Enterprises Laksamana Sukardi, whose office oversees the agency.

Laksamana pointed out on Wednesday that the average capital adequacy ratio (CAR) of the 11 IBRA banks increased to 17.26 percent compared to 16.78 percent in the second quarter.

Speaking during a hearing with the House of Representatives budget committee, he said that the average non-performing loan (NPL) level had declined to 12.04 percent from 14.65 percent.

Bank Indonesia has required all domestic banks to have a minimum CAR of 8 percent by the end of this year or risk closure. The central bank has also required banks to have NPLs of not more than 5 percent by year-end, although there will be no severe sanctions if banks fail to meet this requirement.

The government via IBRA nationalized four ailing private banks and recapitalized seven private banks between 1998 and 1999 during the height of the country's banking crisis.

The four nationalized banks included the publicly-listed Bank Central Asia (BCA), Bank Danamon, Bank Bali, and Bank Niaga. The recapitalized banks -- the government financed more than 80 percent of the recapitalization cost -- are the publicly listed Bank Universal, Lippo Bank, Bank Internasional Indonesia (BII), and non-listed Bank Bukopin, Bank Prima Ekspress, Bank Patriot, and Bank Arthamedia.

Laksamana said that Danamon recorded the highest CAR level of 39.01 percent with NPLs of 7 percent, followed by BCA with a CAR of 36.72 percent and NPLs of 3.99 percent.

He said that as several banks might not be able to meet the year-end CAR requirement, the government had decided to merge five banks, namely Bank Bali, Bank Universal, Bank Prima Ekspress, Bank Arthamedia and Bank Patriot.

Key financial indicators (in percent) of 11 IBRA banks in Q3

CAR NPL Credit growth

Bank Danamon 39.01 7.0 7.55 BCA 36.72 3.99 7.88 Lippo Bank 23.25 23.91 2.54 Bank Bukopin 22.47 3.24 3.68 Bank Niaga 18.70 9.75 10.12 BII 14.14 17.93 5.52 Bank Bali 13.01 15.53 12.53 Bank Prima Ekspress 7.09 18.09 14.11 Bank Patriot 6.10 5.40 5.0 Bank Arthamedia 5.32 17.02 -20.5 Bank Universal 4.07 10.60 2.94

Average 17.26 12.04 4.67