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.