Lippo Bank to close nine overseas offices
JAKARTA (JP): Lippo Bank will close nine of its 13 foreign offices in a cost-cutting exercise as it seeks to improve its local operation.
James T. Riady, deputy chairman of the Lippo Group, said on Monday that the offices which would be closed included the bank's representative offices in Malaysia, Vietnam, Thailand, Australia and the United States.
"The decision is being processed. The bank will then refocus its operation on the domestic market," he told reporters on the sidelines of the Jakarta Initiative Conference.
James said that it would take about six months to complete the measure.
He said that Lippo Bank was expected to recover between US$20 million and US$30 million from the closed offices to strengthen its capital structure.
Lippo Bank, like other local banks, should be more realistic now in doing business, he said, adding that inefficient operations should be eliminated.
"Lippo Bank has taken a position in line with the government's request to trim down operations or to close inefficient offices," he said.
According to him, focusing on the local market would pose no problems to Lippo Bank given signs of recovery in the country's economy.
Earlier reports indicated that James would sell Lippo Bank California.
Lippo Bank California, a trade, finance and real estate business with about $100 million in assets, confirmed that it is in the "final stages of negotiations" to sell itself to another California bank.
The San Francisco-based Lippo Bank California according to James, who owns 99 percent of its shares, decided to sell the bank because he was too busy working on his business in Asia to devote enough time to it.
"In view of conditions in Asia, and Indonesia in particular, he is not able to devote the time and attention he considers necessary to the development of Lippo Bank California," the company said.
Lippo Bank California was founded in 1961 as the Bank of Trade. James took control in 1985, and the name was changed to Lippo Bank California in the late 1980s. (29)