NISP hopes to rake in Rp 600b

The Jakarta Post, Jakarta

Publicly listed Bank NISP, a medium-sized lender, expects to raise Rp 600 billion (US$60 million) in funds from a rights issue later this year, to strengthen its capital in relation with its aim to become a national bank within five years.

NISP will offer some 801.99 million shares at Rp 750 per share, director Muliadi Hardja said in an e-mailed statement on Wednesday.

"With total funds of Rp 600 billion expected from the rights issue, we can predict that our CAR will reach 19 percent," Muliadi said, referring to the bank's capital adequacy ratio, which, as of the end of July, stood at 14.82 percent.

The central bank stipulates in its Indonesian Banking Architecture -- a guideline that the country's banking sector aspires to follow -- that a national bank should meet the minimum capital requirement of Rp 10 trillion in 2010.

Shareholders who do not exercise their rights in the limited public offering will have their shares diluted by up to 16.25 percent in total, Muliadi said further.

The Bandung-based bank, which had total assets valued at Rp 19.4 trillion as of the end of July, is owned in majority by Singapore's OCBC bank through its subsidiary OCBC Overseas Investment Pte. Ltd. with 70.66 percent.

The World Bank's investment arm, the International Finance Corporation (IFC), holds 8.56 percent of the bank's shares while the vested public controls the rest.

The planned rights issue, which is subject to approval at an extraordinary general shareholders meeting next month, will be the fourth since the first in 1998, followed by further issues in 2001 and 2002.

According to its website, in the first half of the year, NISP recorded an unaudited net profit of Rp 94.4 billion, a 24 percent decline from the Rp 124.4 billion it posted in the same period the previous year on the back of higher operational costs.

Net interest income grew to Rp 353.4 billion in the year's first semester from Rp 302.2 billion last year. Loan-to-deposit ratio at the end of July stood at 80.9 percent, with nonperforming loans at 2.24 percent.

NISP shares closed unchanged at Rp 900 on the Jakarta Stock Exchange on Wednesday.

NISP is among a handful of banks that survived the 1997-1998 financial crisis without being bailed out by the government.