Lippobank to raise capital

Lippobank to raise capital

JAKARTA (JP): Publicly-listed Lippobank announced yesterday that it is increasing its authorized capital by 40 percent to over Rp 1 trillion (US$443.1 million) to bring its capital adequacy ratio (CAR) to 12 percent.

The bank said in a statement that the capital increase, which is to be completed by June, is fully underwritten by W.I. CARR, the merchant banking arm of France's Indosuez Group.

After the capital increase, the bank's 12 percent CAR will be well above the 8 percent level required by the central bank, Bank Indonesia, and the Bank for International Settlement.

Lippobank, listed on the Jakarta and Surabaya Stock Exchanges with a market capitalization of over Rp 1.3 trillion, is a private commercial bank with 290 domestic branches and six international representative offices in Sydney, Kuala Lumpur, Bangkok, Hanoi and Ho Chi Minh City.

It has also set up six joint ventures in banking and financing services with National De Paris, Tokai Limited, Daiwa Bank Limited, Bankers Trust Company and GMAC Finance.

The company's president, Markus Parmadi, said that the substantial capital increase is part of a strategy to be aggressive on the capital and liability side of balance sheet but conservative and prudent on the asset side.

Lippobank also reported a 32.4 percent increase in before-tax profits to Rp 137.3 billion in 1995 from Rp 103.7 billion in 1994.

The bank's total assets grew by 10.3 percent as of the end of 1995 to Rp 7.6 trillion and its loans increased by 11.7 percent to Rp 5.8 trillion. (kod)