Moody's assigns ratings to Bapindo

Moody's assigns ratings to Bapindo

HONG KONG (Reuter): Moody's Investors Service said it assigned a senior long-term foreign currency debt rating of Baa3 to the US$125 million floating rate notes due in 2002 of PT Bank Pembangunan (Bapindo).

The rating agency also assigned Ba1/Not Prime ratings to the bank's long- and short-term deposit obligations, respectively.

Moody's also assigned a Bank Financial Strength Rating (BFSR) of "E".

Moody's said the sovereign ceilings for Indonesian bonds and deposits are Baa3/Not-Prime respectively.

The difference between the senior debt and long-term deposit ratings reflects the great likelihood that deposits would be rescheduled in a stress scenario, it said.

Moody's said Bapindo's debt and deposit ratings were based mainly on the strong support given to the bank by its 100 percent shareholder, the Ministry of Finance.

Bapindo faces challenges, it said. The deregulation of the financial services industry in Indonesia has opened state banks to competitive forces including that of private banks.

The profitability outlook for Bapindo is poor because it is burdened by high overheads and a significant level of non- performing assets, Moody's said.

Bapindo had consolidated assets of $6 billion as of December 1994, it added.