Merger of Bakrie banks to be finalized in 6 months

Merger of Bakrie banks to be finalized in 6 months

JAKARTA (JP): The planned merger of Bakrie Group's three banks
will occur in the next six months, according to Aburizal Bakrie,
the chairman of the group.

Aburizal said the merger of Bank Nasional, Bank Perniagaan and
Bank Tabungan Pensiun Nasional (BTPN) would be part of
consolidation measures to cope with the impact of the monetary
turmoil.

"We are still evaluating the merger process and hopefully it
will be finalized within six months," he said here yesterday.

Aburizal said the group had not yet determined which bank
would survive the merger.

The Bakrie Group operates five banks: Bank Nusa, Bank
Nasional, Bank Perniagaan, BTPN and Maybank Nusa, a joint venture
between Bank Nusa and Malaysian Maybank.

Bank Nasional announced in March this year that it would
merge with Bank Perniagaan by the end of the year. Bank
Perniagaan was previously owned by PT Elang Realty.

"The name of the merged bank will be Bank Nasional," an
executive of the Bakrie Group said.

After the merger, assets of Bank Nasional will increase to
about Rp 3.5 trillion.

PT Bakrie Capital Indonesia, a subsidiary of the Bakrie Group,
bought 70 percent of debt-ridden property developer PT Elang
Realty for Rp 150 billion (US$62.5 million) in March this year
and renamed it PT Bakrie Land Development.

Following the acquisition, Bakrie Capital Indonesia also
bought Bank Perniagaan for Rp 200 billion.

Aburizal, also chairman of the Indonesian Chamber of Commerce
and Industry, said yesterday that the central bank should
publicly announce soon which banks should merge as part of the
rescue plan to solve their financial difficulties.

"I believe there won't be any more closures by the
government," he said.

The government closed 16 banks early this month as part of
financial reforms in a IMF-led bailout package to restore the
country's economy. The liquidations included Bank Andromeda,
which is 25 percent owned by President Soeharto's second son
Bambang Trihatmojo.

"The important thing now is that weak banks and strong ones
merge in order to improve their capital structure," Aburizal
said.

Analysts and economists said mergers in the banking system
were necessary to improve their performance in the face of fierce
competition in the globalization era.

In a related development, reports said banks under the
Tirtamas Group, the Risjad Salim Group and the Ramako Group would
merge in an effort to improve their performance.

"Bank Risjad Salim will merge with Bank Utama," Benny Santoso,
a director of the Salim Group, said after signing the purchase of
19 percent of PT Bank Danamon International on Monday.

"The merger will be finalized by the end of the year," he
said.

Three banks under the Tirtamas Group -- Bank Papan Sejahtera,
Bank Pelita and Bank Kredit Asia -- are expected to merge by the
end of the year. The Tirtamas Group is controlled by Hashim S.
Djojohadikusumo.

The Ramako Group, which owns Bank IFI and Bank Asta, are set
to merge later this year as part of the group's move to
strengthen its banking business. (aly)