Lippo expects to recover at least 50% of its assets

Tony Hotland, Jakarta

Bank Lippo aims to recover at least 50 percent of its foreclosed assets, valued at about Rp 2.3 trillion (US$245.2 million), the sales of which will be decided on June 29 during the publicly listed bank's shareholders meeting.

Bank Lippo president Joseph Luhukay said on Tuesday the assets, mostly property, were to be sold because the bank needed to spend Rp 300 billion annually in carrying costs and opportunity loss.

"Keeping the assets is very costly. We have to pay taxes on property and real estate, fees to guard and maintain the assets, and other costs," he told reporters after a meeting with House of Representatives Commission IX on financial affairs.

If shareholders agree to sell the assets, Joseph said sales would be regulated to ensure a maximum recovery rate.

The foreclosed assets were taken as collateral from defaulting debtors in the wake of the late-1990s financial crisis.

"If the sales plan is agreed upon, it would probably take three to four years to complete. We must observe market conditions and potential buyers. We won't rush to sell all the assets because of their great value," he said.

Joseph further said the management was now reviewing Lippo's 2004 target, as he claimed that the bank's first-quarter performance had surpassed their projection.

"I'm optimistic about our growth. As of June, we've grown by up to 30 percent compared to the same period last year. Our non- performing loans comprise only 0.6 percent of total loans," he said.

Bank Lippo is 52.02 percent owned by Swissasia Global, 35.5 percent by the public, 9.6 percent by Lippo E-Net and 2.88 percent by an asset management company.