Japan's banks reopen offices

Japan's banks reopen offices

TOKYO (Nikkei): Bank sources said Japanese banks planned to
resume business operations in Indonesia yesterday, expecting the
social unrest to subside with the resignation of President
Soeharto, the Nihon Keizai Shimbun said in its yesterday morning
edition.

But other Japanese companies remain wary of the situation and
were eagerly awaiting a televised speech due to be given by the
new president B.J. Habibie on Thursday evening.

Soeharto resigned after almost 32 years in power on Thursday
morning and was replaced by Habibie who was immediately sworn in
as president.

Speaking of the exposure of Japanese banks in Indonesia, a
Sumitomo Bank executive said, "Politics and economics are closely
linked in the country. We cannot predict the outcome of
negotiations on debts owed by Indonesian borrowers."

Sumitomo's balance of outstanding loans to Indonesian
borrowers totaled some $1.2 billion as of the end of March, only
19 percent of which was covered by the bank's bad-loan reserves.