IBRA delays sale of Bank Permata
P.C. Naommy, The Jakarta Post, Jakarta
Deputy chairman of the Indonesian Bank Restructuring Agency (IBRA) I Nyoman Sender said on Tuesday that the agency had decided to delay the sale of a majority stake in Bank Permata.
"Since we haven't had much time to conclude the sale plan, we will divert it to the asset supervision agency for further processing," Nyoman Sender said as quoted by detik.com.
The as yet unestablished asset supervision agency is to manage the unsold assets of IBRA, the mandate of which will expire on Feb. 27. The new agency will fall under the Ministry of Finance.
Sender said IBRA would finish its administrative affairs and would not take any decisions on sales nor any other material issues.
Sender had previously reiterated the agency's plan to sell a 51 percent stake through a strategic sale, with an additional 20 percent to be sold via block sale and drip sale mechanisms on the stock market. IBRA currently holds a 97.2 percent stake in the bank. The sale was initially planned as part of IBRA's asset sale program this year to help finance the state budget deficit.
For the past year, however, IBRA has been facing difficulties in selling Bank Permata due to an ongoing legal dispute over funds held by the bank.
The office of the Coordinating Minister for the Economy reported that by September 2003, Bank Permata had pushed down its capital adequacy ratio from 10.40 percent in 2002 to 10.10 percent, lower its non-performing loans from 27.20 percent in 2002 to 16.10 and increase its loan to deposit ratio from 40.50 percent to 40.70 percent, thanks to IBRA.
The report also showed that during its four years of operation, IBRA had recovered Rp 163.26 trillion in state funds, 28 percent in credit assets and 151 percent in property assets.
Bank Permata, which currently boasts total assets of around Rp 30 trillion (US$3.5 billion), was formed two years ago as the result of a merger of five unhealthy banks: Bank Bali, Bank Universal, Bank Arthamedia, Bank Prima Express and Bank Patriot, all of which were controlled by IBRA.
Separately, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said that after it closed, IBRA would not conduct any transactions.
"The only exceptions allowed by the FSPC are those IBRA assets for which decisions had already been made, but for which the administrative process had not been completed," he said, referring to the Financial Sector Policy Committee (FSPC), a powerful grouping of economic ministers overseeing IBRA.
Dorodjatun further explained that the deadline for finishing administrative processes would be regulated through the issuance on Feb. 27 of a Presidential Instruction in conjunction with IBRA's closure.