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)