IBRA declares BII, Permata, Danamon financially fit

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) has declared Bank International Indonesia (BII), Bank Permata and Bank Danamon financially sound, as it handed back the monitoring of the three banks to Bank Indonesia (BI).

"The three banks have all fulfilled the minimum required capital adequacy ratio (CAR), kept their non-performing loans (NPL) in check and fulfilled all their other obligations to the state," IBRA chief Syafruddin A. Temenggung said on Thursday during the handing-over ceremony.

The central bank has set a minimum CAR of 8 percent and a maximum NPL of 5 percent for banks under IBRA's supervision to be declared financially fit.

BI's senior deputy governor Anwar Nasution, meanwhile, said that the monitoring transfer would hopefully restore the public's trust in the three banks and the banking sector as a whole.

"To further maintain this restoration of trust, BI will continue to monitor the banks and insist that all banks implement risk management for their operations," Anwar said.

The three are the last of banks supervised by IBRA to be declared financially fit, after the agency previously declared Bank Central Asia (BCA) and Bank Niaga fit.

In wake of the late 1990s financial crisis, the government set up IBRA to take over many mismanaged banks that crumbled due to the crisis. The agency has injected some Rp 144.5 trillion (US$17 billion) in emergency liquidity funds to bail out the banks.

IBRA was officially closed late last month, but a skeleton staff is still helping to wrap up some cases until the end of April.