Jamsostek urged to join BNI to bid for BTN

Urip Hudiono, The Jakarta Post, Jakarta

The government wants state insurance firm PT Jamsostek to team up with Bank Negara Indonesia (BNI) in a consortium to bid for Bank Tabungan Negara (BTN), the minister for state enterprizes says.

Speaking on the sidelines of a memorandum of understanding (MOU) signing between state property firm Perum Perumnas and Malaysian property developer Metro Ikram Sdn Bhd, State Minister of State Enterprises Sugiharto said the bid should be in the form of an acquisition, not a merger.

"I expect at least Jamsostek to join BNI in the process, and hopefully other pension fund managers as well," Sugiharto said. The acquisition would be vital to support the government's plan to build one million low-cost houses within the next five years, he said.

"From the beginning, I have pushed for the acquisition of BTN, and not a merger."

The government has assigned BTN, a wholly state-owned bank which specializes in providing housing loans for low to middle income groups, to manage a financing scheme for the houses that will be constructed.

BTN, however, currently lacks the required capital and the government is seeking a possible strategic partner for the bank.

BNI president Sigit Pramono earlier said the country's third- largest bank by assets had prepared between Rp 2 trillion and Rp 3 trillion to acquire BTN in a merger, should the plan be given the go-ahead from the government and the central bank.

Sugiharto said a merger would be difficult to implement in the short term, because it required a voluntary integration and blending of business cultures between the companies involved, which would take a long time.

The acquisition of BTN by a state consortium involving Jamsostek would improve the bank's capital resource structure and prevent the dilution of the government's ownership in BTN, he said.

Jamsostek and other pension fund managers, which manage long- term funds, would also complement BTN's financial structure.

"There is currently a mismatch in BTN's capital resources, as its third party liabilities are mostly short-term deposits, while its investments are mostly for long-term housing loans," Sugiharto said.

Sugiharto also witnessed the signing of the MOU by Perumnas president Harry A. Jasa Slawat and Metro Ikram president Tan Sri Halim Saad.

Harry said the agreement included the construction of 10,000 low-cost houses worth some Rp 400 billion.

"The houses will be built in Surabaya, Medan and Bekasi," he said."