Moody's rates four RI banks

Moody's rates four RI banks

HONG KONG (Reuter): Moody's Investors Service said yesterday it assigned first time ratings to four Indonesian private banks, with long-term foreign currency deposit ratings ranging from Ba1 to Ba2.

Short-term foreign currency obligations of the four were rated not prime, it said.

Moody's said it assigned PT Bank Bali ratings of Ba2/Not Prime and a Bank Financial Strength Rating (BFSR) of D.

It assigned PT Bank Dagang Nasional Indonesia (BDNI) ratings of Ba2/Not Prime and a BFSR of D. It also gave a Ba2 rating to the US$100 million floating rate note due 2000 issued by BDNI- Cayman Islands branch.

Moody's assigned PT Bank Danamon ratings of Ba2/Not Prime and a BFSR of D. It also gave a Ba2 rating to the $30 million floating rate note due 2000 issued by Bank Danamon-Cayman Islands branch.

It assigned PT Panin Bank ratings of Ba1/Not Prime and a BFSR of D-Plus.

The rating agency noted the sovereign ceilings for Indonesian bonds and long-term deposits were Baa3 and Ba1, while the ceiling for all short-term obligations was Not Prime.

Moody's said the four rated banks were among the 10 largest private banks in Indonesia and were all publicly listed.

Their asset quality and capital levels appeared strong in comparison with those of state banks, although the rapid loan growth recorded by the banks during the past two years could have a negative impact on asset quality in the future.

Growth in lending had also outstripped growth in deposits.

Moody's said Indonesia's accounting, legal and regulatory infrastructures were weak though improving.

Disclosure issues were considered significant impediments to the analysis of banks, although disclosure for listed banks was better than that for state and unlisted banks, it said.

The operating environment for Indonesian private banks would be more challenging over the medium term as the sector entered into a period of consolidation, rationalization and specialization, Moody's said.