Lippo, Universal improve CAR levels

Lippo, Universal improve CAR levels

JAKARTA (JP): Publicly listed PT Bank Lippo and Bank Universal
have become sound banks following the realization of the bank
recapitalization at mid year, raising their capital adequacy
ratio (CAR) to above 7 percent.

After the recapitalization -- in which the government helped
inject Rp 6.05 trillion into Lippo's equity -- the bank's CAR
increased to 7.26 percent as of July 31, the bank's president Edi
Sindoro told a hearing with the House of Representatives
Commission VIII for finance and banking on Tuesday.

CAR is the ratio between net equity and risk-weighted assets.
The government considers domestic banks as sound if their CAR
levels are 4 percent or above.

"Now Bank Lippo is a sound and solvent bank," Edi said, adding
that the bank had raised its net equity from negative Rp 5.6
trillion before the recapitalization (as of Dec. 31) to positive
Rp 1.47 trillion afterward (as of July 31).

Edi added that Lippo booked a net income of Rp 11 billion
(US$1.4 million) for the month of August alone, after it had
netted a cumulative loss of Rp 1.9 trillion during January to
July.

Edi anticipated a much lower negative net income this year as
compared to last year's Rp 8.3 trillion net loss as the bank had
started to make a positive net income in August.

Lippo's shareholders are currently the government with 59.5
percent, the founding shareholder Riady family with 14 percent,
foreign strategic partners 8.1 percent and the investing public
18.4 percent.

The bank's total assets before (as of Dec. 31) and after (as
of July 31) the recapitalization were Rp 14.4 trillion and Rp
20.2 trillion respectively.

Meanwhile, publicly listed PT Bank Universal said that its CAR
as of June 30 increased to 7.8 percent following the injection of
a Rp 5.06 trillion bank recapitalization fund, which was mostly
funded by the government.

The bank's president, Stephen Satyahadi, said that in the Bank
Universal recapitalization program, the government injected Rp
4.1 trillion of the required funds, while founding shareholder PT
Astra International supplied Rp 490 billion and the investing
public Rp 475 billion.

Stephen said the current shareholders of the bank were the
government with 78.91 percent, PT Astra International with 11.53
percent and the investing public with 9.57 percent. (udi)