Permata offers Rp 1t mutual fund

Permata offers Rp 1t mutual fund

Evi Mariani, The Jakarta Post, Jakarta

Bank Permata offers bond-based mutual funds called
PermataInves worth Rp 1 trillion (US$117 million) to its
customers, especially the preferred ones whose deposits exceed Rp
500 million.

The bank has 1.3 million customers nation-wide, of which 5,000
are preferred.

The minimum investment for the mutual funds is Rp 100 million.

The benefits to be earned by the investors can be measured by
an average after tax earning from three-month deposits in state
banks. The investors also can cash out their investments any time
they want without having to pay any tax.

However, there are also risks in this investment. According to
the brief prospectus on the mutual funds, the fluctuating prices
of bonds could reduce the investment value. The possible
inability of the investment manager could also cause a risk in
the liquidity of the funds.

The investment manager for the funds is PT Danareksa
Investment Management and the custodian bank is Bank Permata
itself.

The bank will invest up to 80 percent of the funds in bank
recapitalization (recap) bonds and the remainder in money market
instruments.

Currently, the recap bonds of Bank Permata amount to Rp 11.3
trillion.

The sales of the mutual funds, which was initially offered on
May 19, were part of the bank's bid to reduce its recap bonds,
said the bank's president, Agus Martowardojo, in the sidelines of
the mutual fund announcement on Tuesday.

Bank Permata is a merger of five banks --Bank Bali, Bank
Universal, Bank Patriot, Bank Artamedia and Bank Prima Express.
With a total asset of Rp 28 trillion, the bank is the seventh
biggest in the country.

As of March, the bank booked Rp 22 trillion in third party
funds and Rp 8.3 trillion in loans.

"We target to increase the loans by Rp 3 trillion to Rp 11.3
trillion as of the end of this year," said Agus.

Responding to a reporter's question, he said that as of the
end of 2002, the bank's non-performing loans (NPL) reached 12
percent of its total loans. As of March, it succeeded in
decreasing the NPL to 9.7 percent. However, the number was still
far above the maximum NPL of 5 percent required by the central
bank.

Therefore, the bank was making all efforts to decrease its NPL
to below 5 percent by the end of June, Agus said.

"We are selling bad loans and collaterals to third parties. We
are also restructuring, reconditioning and rescheduling bad loans
by, for example, shifting working capital credits into investment
credits," said Agus.