IBRA in rush to meet 2004 fiscal target
IBRA in rush to meet 2004 fiscal target
Dadan Wijaksana, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) plans to sell
several major assets over the final two months of its term in an
effort to meet its Rp 5 trillion (US$590 million) revenue target.
The assets include a majority stake in Bank Lippo, some Rp 1.3
trillion worth of property, non-performing loans and investment
and commercial papers with a total book value of more than Rp 70
trillion.
All of the sales are scheduled to be concluded by the end of
January, a press statement released late on Monday said.
The Rp 5 trillion revenue target was set by the government to
help cover the 2004 state budget deficit, expected to be Rp 24.4
trillion, or 1.2 percent of gross domestic product.
IBRA is scheduled to close its doors for good on Feb. 27.
Since its establishment almost six years ago, the agency has
raised Rp 163.2 trillion from the sale of assets it took over
from the banking sector following the 1997 financial crisis.
The agency was established to clean up the country's banking
sector, which was saddled with huge debts due to the crisis.
It was mandated to restructure and sell the assets -- in the
form of non-performing loans and fixed assets surrendered by
indebted bank owners -- to raise funds to help finance the state
budget, which ironically is burdened with the huge costs of
bailing out these troubled banks.
In total, the agency took over more than Rp 600 trillion worth
of assets from bankrupt or ailing banks, with a recovery rate of
about 28 percent, which IBRA chairman Syafruddin Temenggung said
was fairly respectable.
The recovery rates of similar agencies in countries such as
China, Thailand and South Korea were all below 25 percent.
According to the statement, the sale of IBRA's remaining major
assets is high on the agency's agenda before it closes down.
Also high on the agenda is final preparations for the
establishment of companies to take over and manage those assets
IBRA fails to sell.
The agency also plans to set up a special unit under the
Ministry of Finance to take over the implementation of the
blanket guarantee program on bank deposits.
The unit will operate on a temporary basis until the country
gets a deposit guarantee agency, which the government plans to
establish after the required law is passed.
One of the most crucial tasks for IBRA this year is to
formulate actions against indebted former bankers.
Of 39 indebted former bankers, 30 have been classified as
"cooperative" in settling their debts, while the other nine have
been "uncooperative", the statement said.