Seven state banks' total bad loans rise to US$3.37b

Seven state banks' total bad loans rise to US$3.37b

JAKARTA (JP): The seven state banks' bad loans increased to Rp
7.07 trillion (US$3.37 billion) at the end of August from Rp 6.39
trillion at the end of last December, according to the central
bank.

Bank Indonesia Governor J. Soedradjad Djiwandono said
Wednesday the bad loans accounted for 2.33 percent of the banks
total outstanding credits, down slightly from 3.39 percent at the
end of last December.

Soedradjad told a hearing of the Budgetary Commission of the
House of Representatives that state and private banks' recovery
of problem loans was slow because of their poor coordination.

"The related institutions should therefore improve their
cooperation to expedite the collection of problem loans,"
Soedradjad was quoted by Antara as saying.

The seven state banks are Bank Negara Indonesia 1946 (BNI),
Bank Pembangunan Indonesia (Bapindo), Bank Bumi Daya, Bank Rakyat
Indonesia, Bank Dagang Negara, Bank Ekspor Impor Indonesia and
Bank Tabungan Negara.

Indonesia has some 230 private commercial banks, provincial
development banks and secondary banks.

Soedradjad said all banks bad loans totaled Rp 10,340 billion
at the end of August, or 3.4 percent of their total credits.

Domestic private banks accounted for Rp 2.19 trillion of the
bad loans, up from Rp 1.43 trillion at the end of last December.

In the same period, bad loans at provincial development banks
rose to Rp 552 billion from Rp 482 billion and those at foreign
banks and joint-venture banks rose to Rp 522 billion from Rp 489
billion.

Soedradjad said problem loans at all commercial banks
increased to Rp 9.09 trillion from Rp 7.36 trillion, while their
doubtful loans rose to Rp 12.26 trillion from Rp 11.73 trillion.

Deficit

Answering questions from House members, Soedradjad said the
country's services-sector deficit for the 1996/1997 fiscal year,
ending next March, might increase because the deficit in the
first semester was $6.7 billion.

The transportation sector alone contributed $2.4 billion to
the services deficit, he said.

Other sectors contributing to the first-semester deficit were
government and private-sector offshore debt services which was
valued at $1.4 billion and $1.7 billion, respectively.

But Soedradjad projected a smaller foreign-debt service
payment next fiscal year because the government had prepaid its
high-interest debts to the World Bank and the Asian Development
Bank.

"The overall deficit in the services sector, however, will
increase slightly again next fiscal year," the governor said.

Soedradjad said the government would not impose any rules to
restrict foreign borrowing by the private sector although the
private sector's offshore debts had risen sharply.

But for the sake of records and supervision, Soedradjad said,
the government would continue to require that all private
overseas borrowing was reported to the monetary authority.

On the trade account, Soedradjad projected that Indonesia
would enjoy a surplus of $2.1 billion in the first semester of
the 1996/1997 fiscal year, with exports worth $25.2 billion and
imports worth $23.1 billion.

The government in May revised its prediction of the current
account deficit for the current fiscal year upward to US$8.7
billion from $6.9 billion. (rid)