S&P welcomes Lippo Bank fine

S&P welcomes Lippo Bank fine

JAKARTA: Standard & Poor's Ratings Services said Friday that a fine of Rp 2.5 billion (about US$277,000) imposed on Lippo Bank Tbk by the Indonesian Capital Market Supervisory Agency is an encouraging regulatory development.

While an investigation into irregularities in the trading of shares in the bank continues, the fine nevertheless signaled a step towards tighter regulations for the financial system as a whole, S&P said in a statement.

The Indonesian Capital Market Supervisory Agency has also ordered the bank's current management to explain to shareholders the contradiction between two financial reports released in late 2002.

A separate directive by the Indonesian Bank Restructuring Agency ordering a change in the bank's management team later this month will not, however, affect the rating on the bank, as it already incorporates the risks inherent in the bank's credit profile and the environment in which it operates, the agency said. -- JP