IBRA picks BNI, Deloitte to aid in commercial credit settlement

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has selected a consortium of Bank Negara Indonesia (BNI) and Deloitte Touche Tohmatsu to handle the commercial credit settlement in the second round of its outsourcing program.

Agency deputy chairman Irwan Siregar said on Thursday that as servicing agent, the BNI and Deloitte consortium would help in restructuring some bank nonperforming loans (NPLs) worth Rp 5.42 trillion (US$677.5 million).

The Rp 5.42 trillion NPLs comprise 1,209 accounts of 491 obligors or 505 debtors. An obligor is a group of debtors owned by a single business party or business group.

"The outsourcing program is conducted because it involves a large number of debtors, but in terms of value it is not very significant," he said in a statement.

Irwan said BNI and Deloitte had outbid two other financial institutions, Bank Central Asia and a consortium of Bank Panin and ANZ, in the final stage of the scoring process.

He said the BNI and Deloitte consortium offered the lowest fee.

IBRA shortlisted 10 financial institutions, including the three firms as well as a consortium of Deustche Bank and Bank Mandiri and GE Capital and Goldman-Sachs, out of 37 companies that submitted an interest in the program.

The scoring process to select the company as servicing agent was conducted with assistance from independent consultant Arthur Andersen.

Irwan said the outsourcing program represented IBRA's effort to accelerate the restructuring of commercial debts of between Rp 5 billion and Rp 50 billion.

IBRA received more than Rp 200 trillion worth of nonperforming loans from domestic banks as part of the country's bank restructuring program.

The agency is mandated to recover the loans in a bid to help finance the costly bank restructuring program.

IBRA said the outsourcing program took three tranches, scheduled to be completed before June this year, in compliance with the letter of intent signed recently with the International Monetary Fund.

Bank Danamon was selected as the servicing agent for the first tranche of the outsourcing program. (cst)