IMF wants timetable for sale of state banks
IMF wants timetable for sale of state banks
JAKARTA (JP): The International Monetary Fund (IMF) has asked
the government to prepare a timetable for the sale of state-owned
banks, according to director general for financial institutions
Darmin Nasution.
"They have reminded us to start preparing a timetable for the
public offerings of state banks," Darmin told reporters, after a
meeting with the IMF special mission on Saturday.
A visiting IMF team has been in Jakarta since last week to
negotiate fresh economic reform targets under the next Letter of
Intent (LoI) in a bid to revive the fund's US$5 billion bailout
loan to the country.
"I don't know whether it (the timetable) will be part of the
LoI," Darmin said, adding that the draft of the new LoI was
expected this week.
The IMF demand, however, seems to be against the wish of
Minister of Finance Rizal Ramli, who insisted on Friday that the
fund should not interfere in the sale of government assets as
such a move would jeopardize their prices.
"How we do it (asset sales), when we do it and what we sell
should be left to the government of Indonesia," Rizal told
reporters.
The only publicly listed state-owned bank so far is PT Bank
Negara Indonesia (BNI), which floated its shares at the Jakarta
Stock Exchange (JSX) in 1996.
BNI is 64.79 percent owned by the government, 14.3 percent by
foreign investors, and 20.91 percent by the investing public.
Other state banks including Bank Mandiri, Bank Rakyat
Indonesia (BRI) and Bank Tabungan Negara (BTN) are still fully
owned by the government.
In addition to state banks, the government has also
nationalized four large private banks following the devastating
1997 financial crisis and has taken majority ownership in seven
other major private banks after it recapitalized them. This group
of banks are under the ownership of the Indonesian Bank
Restructuring Agency (IBRA), a unit of the finance ministry.
But the government has said that it intends to gradually
divest ownership in banks under IBRA after the agency restructure
the banks. The divestment program is expected to be completed in
2004.
The government also plans to privatize state-owned companies,
including banks.
The proceeds from the privatization and the sale of IBRA
assets would be used to finance the state budget deficit.
"By the end, all this restructuring, the improvement of their
organization, management and branches, is meant to groom the
banks for initial public offering (IPO)," Darmin said.
But he added that the IMF had not pushed the government to
speed up the divestment of the banks, neither had it demanded the
release of a larger government stake to the public.
"They (the IMF) never told us how much we must sell," he said.
Darmin said he also briefed the IMF team on the acquisition
plan of publicly listed PT Bank Internasional Indonesia (BII) by
Bank Mandiri. BII is one of the banks under IBRA's ownership.
"They warned the acquisition should not burden Bank Mandiri as
the bank has yet to complete its merger process," he said.
Bank Mandiri was founded in 1999 as a result of the merger
of four state banks.
It has made the bank the country's largest bank in terms of
assets. But Bank Mandiri has since been struggling to consolidate
the operation of its various branches.
Banking analysts have warned that the acquisition of BII may
further complicate the bank's consolidation efforts.
The announcement of the acquisition plan by the government
last week came as Bank Mandiri is preparing for an IPO later this
year.
Darmin said the IMF have made no suggestion to the government
to drop the acquisition plan, though he could not say whether
they had agreed to it.
The government launched the acquisition plan as a way to save
the ailing BII.
During the meeting with the IMF, he went on, they also
discussed revisions made to the 2001 state budget.
"The IMF just wanted to hear more about the revisions we made
on the state budget," he said.
According to Darmin, the IMF had expressed no objection to the
revised budget. (bkm)