IBRA expects to assume Rp 220t in NPLs
IBRA expects to assume Rp 220t in NPLs
JAKARTA (JP): The asset management unit of the Indonesian Bank
Restructuring Agency (IBRA) is expected to receive Rp 220
trillion (US$25.3 billion) in nonperforming bank loans (NPLs) by
the end of this month, a senior official at the agency said on
Tuesday.
Head of IBRA's loan resolution department Irwan Siregar said
that 70 percent of the loans were categorized as corporate loans
with individual loan sizes of more than Rp 5 billion.
He said the agency received more than Rp 158 trillion in NPLs
from 10 banks liquidated in 1998 (Rp 35 trillion), seven state
banks (Rp 100 trillion) and Bank Danamon and Bank Tiara (Rp 23.2
trillion).
Danamon and Tiara were among four banks taken over by the
government last year.
But Siregar did not mention the amount assumed from Bank
Central Asia and Bank PDFCI, the other institutions taken over
last year.
"We expect to receive the remaining credit assets (NPLs) from
nine more banks already taken over, 38 closed banks and nine
recapitalized banks by the end of this month," Siregar told a
news conference.
The government closed down 38 banks, took over seven banks and
decided to recapitalize nine banks on March 13.
IBRA deputy chairman Eko S. Budianto said the agency would try
to design a loan resolution program for the corporate debtors.
He said that in the initial stage, about 20 of the largest
debtors would be encouraged to join a government-backed debt
restructuring program, details of which are set to be announced
on Friday.
Eko added that the largest debtors included PT Chandra Asri
Petrochemical Center, Tirtamas Group, PT Semen Cibinong, Bank
Papan Sejahtera Group and PT Timor Putra Nasional.
He declined to make other disclosures, reasoning that it might
be counterproductive to restructuring efforts and recovery of the
loans.
"We have to adopt a positive approach," Eko said.
It's an open secret that most of the corporate debtors,
particularly at state banks, are politically well-connected
businesspeople, including siblings of former president Soeharto
and the family's associates.
Irwan said IBRA would group the corporate debtors into "those
with integrity and those without integrity".
He explained there would be restructuring for debtors with
positive cash flow and negative cash flow but who showed
integrity or good faith in repaying their debts would be
restructured. Those with no economic value despite and with
integrity would be liquidated.
He said those with no integrity would face foreclosure and
liquidation of their assets.
Irwan said the remaining 30 percent of the Rp 220 trillion in
NPLs were categorized as loans to small and medium-sized
enterprises and retail loans, whose management would be assigned
to third parties.
"We will adopt an outsourcing strategy but with tight
monitoring from IBRA," he added.
IBRA also reported that it raised a total of Rp 35.64 billion
from the auction of noncore assets of the 10 banks liquidated
last year.
Head of the noncore asset department at IBRA, Gotlieb, said
that the agency was preparing more auctions of various vehicles
and furniture between this month and June 5.
He said that the agency was still in the process of
verification of the noncore assets of the 38 banks closed in
March.
Eko said IBRA appointed Bank Central Asia as the agency's bank
to administer debt payments from the debtors of the 38 closed
banks. (rei)