Panin Bank gets B/C rating from Canadian company
JAKARTA (JP): Publicly listed Panin Bank has won a short-term credit (intra-country-issuer) rating of B/C from Thomson BankWatch of Canada.
"The rating granted to Panin Bank places the institution among the best in the country," Thomson BankWatch's president for Asian operations, Philippe F. Delhaise, told reporters here yesterday.
He explained that Thomson BankWatch's credit ratings range from A to E, but "there will be no A or B rating in Indonesia, where banking failures and scandals occur, thereby influencing credit risks."
Its ratings are based on quantitative data of the quality of management and assets as well as the liquidity of the banks, he said.
Delhaise acknowledged that the international financial community is reassessing its views on Indonesian banks in the wake of the "Bapindo disaster."
Indonesia's banking industry has been rocked by a scandal in which executives of the state-owned Bank Pembangunan Indonesia (Bapindo) allegedly colluded with the founder of the Golden Key Group. The case, which has caused a financial loss of over Rp 1.3 trillion (US$600 million), is being tried at Jakarta courts.
The recent failure of now-defunct Bank Summa coupled with huge financial losses at Bank Duta due to speculation in foreign exchange have increased the credit risk of Indonesian banks, Delhaise said.
Conservative
However, "Thomson BankWatch is of the opinion that a number of Indonesian banks have conservative ratios, are well managed and deserve a place in international markets," he said.
Thomson BankWatch, which has taken over the Capital Information Service (CIS) of Hong Kong, has been assigned to rate 25 banks in Indonesia, including five state banks.
Delhaise said Indonesia's banking industry is actually not as bad as described by the New York-based Standard & Poor's, which said recently that "the Indonesian banking system is currently undergoing a period of financial stress and adjustment as a result of deregulation in the late 1980s and early 1990s."
Standard & Poor's also said that as a consequence, the medium- term outlook for the Indonesian banking sector overall is considered to be one of relative uncertainty and instability.
However, Delhaise acknowledged yesterday that Indonesia's banking industry is now in a transition period following the government's introduction of a series of deregulatory measures, which have encouraged banks to expand rapidly.
"But some Indonesian banks maintain their conservative management," he said.
According to Roosniati Salihin, executive vice president of Panin Bank, the bank's rate of return on assets was recorded at 1.95 percent as of April, with the rate of return on equity at 18.62, loan to deposit ratio at 81.23 percent and capital adequacy ratio at 13.97 percent.
With total assets of Rp 3.18 trillion and capital of Rp 347.6 billion as of April, the bank made an after-tax profit of Rp 14.43 billion during the first four months of this year, as compared to Rp 38.66 billion last year. (riz)