S&P affirms ratings on seven Indonesian banks
S&P affirms ratings on seven Indonesian banks
MELBOURNE (Dow Jones): Standard & Poor's credit rating agency
yesterday affirmed its ratings on seven Indonesian banks and
withdrew its rating on one bank, following the Indonesian
government's recent announcement to either merge, freeze, or
nationalize six of these eight banks.
The ratings on Bank Negara Indonesia and Bank Internasional
Indonesia are affirmed, as these banks are unaffected by the
government announcement, S&P said in a statement.
"Their long-term local currency ratings remain on CreditWatch,
with negative implications as a result of the uncertain success
of the Indonesian government's efforts to initiate a recovery of
the banking sector," the agency added.
The public information ratings of triple-Cpi on state-owned
Bank Dagang Negara, Bank Bumi Daya, and Bank Ekspor Impor
Indonesia are affirmed following the government's plan to merge
the three banks with state-owned Bank Pembangunan Indonesia,
which isn't rated, and the corporate banking operations of state-
owned Bank Rakyat Indonesia to form a new bank, to be named Bank
Mandiri.
The ratings on Bank Dagang Negara, Bank Bumi Daya and Bank
Exim will be withdrawn, and a rating will be assigned to Bank
Mandiri when the merger takes place, S&P said.
The triple-Cpi rating on Bank Rakyat Indonesia is affirmed;
the rating will be reviewed again when the full impact of the
divestiture of Bank Rakyat Indonesia's corporate book on the
bank's profile can be better assessed. The rating on Bank Central
Asia remains "not meaningful," which is used to indicate the bank
is subject to regulatory intervention.
"That is despite the government's plan to nationalize Bank
Central Asia, along with Bank Danamon, Bank PDFCI, and Bank
Tiara, on the grounds that the government intends to sell these
banks in the near future," S&P said. None of those banks are
rated by S&P.
The "not meaningful" rating on Bank Dagang Nasional Indonesia
is withdrawn, reflecting the government's action of suspending
its operations, plus those of Bank Umum Nasional and Bank Modern
(both not rated), in likely preparation for eventual liquidation,
S&P said. Neither Bank Umum Nasional or Bank Modern are rated.
Moody's also Wednesday withdrew the Ca long-term and Not Prime
short-term foreign currency deposit ratings, and the financial
strength rating of E for Bank Dagang Nasional Indonesia (BDNI).
The rating agency also confirmed the long-term foreign
currency debt rating of Caa3 for BDNI Cayman Islands.