State firms suffer losses of $6.39b

JAKARTA (JP): Finance minister Bambang Sudibyo said on Monday that 20 state-owned companies suffered combined financial losses of Rp 47.65 trillion (US$6.39 billion) last year.

The giant Bank Mandiri experienced the largest loss of Rp 38.86 trillion, followed by the publicly listed Bank Negara Indonesia (BNI) with Rp 10.20 trillion.

Speaking in a hearing with the House of Representatives's budget committee, Bambang said the primary reason for the losses of the state banks was the negative spread between their interest expenses and interest earnings.

He also said that Bank Rakyat Indonesia (BRI) gained a financial loss of Rp 1.41 billion in 1999.

Bank Indonesia stated in its 1999 annual report that the country's banking sector was still in the red last year although profitability had slightly improved, particularly after domestic interest rates steadily declined.

The central bank said the cumulative loss (before tax) of the banking sector last year was Rp 91.7 trillion, but this was 48.68 percent lower compared to Rp 178.7 trillion in the previous year.

Bank Mandiri is the country's largest bank and was formed by the merging of four state banks last year -- Bank Bumi Daya (BBD), Bank Dagang Negara (BDN), Bank Ekspor Impor Indonesia (Exim), and Bank Pembangunan Indonesia (Bapindo).

The government completed Bank Mandiri's recapitalization in 1999 by injecting bonds worth Rp 178 trillion, boosting its capital adequacy ratio (CAR) to more than 12.44 percent.

The bank is planning to launch an initial public offering (IPO) early next year in a bid to raise $1.5 billion.

Bambang said he had agreed to the bank's IPO plans. The finance minister represents the government as the shareholder of state banks.

The government will also soon recapitalize Bank BNI by injecting bonds worth Rp 52.8 trillion.

The bank was hit last year by a controversy when a minister alleged that former president Soeharto intervened in the channeling of Rp 9.6 trillion in loans from the bank to the textile conglomerate Texmaco Group.

Much of the loans have now fallen into the bad loan category.

Bambang added that the airline PT Merpati Nusantara booked a loss of Rp 48.70 billion, mainly because the rupiah-based tariff could not cover its dollar-based operational cost.

He said other state-owned firms which suffered big losses included paper company PT Kertas Letjes (Rp 193.65 billion), glass maker PT Industri Gelas (Rp 58.39 billion), housing construction firm PT Pembangunan Perumahan (Rp 99 billion), and plantation firms PTPN XIV (Rp 39.37 billion), and PTPN XI (35.65 billion).

Bambang stated that these companies were badly hit by the high interest rate policy and suffered inefficiency due to the out of date plant equipment.

He didn't report the financial condition of the remaining 120 state firms.

Elsewhere, Bambang said the Indonesian Bank Restructuring Agency (IBRA) had raised Rp 11.41 trillion as of January 2000 against its Rp 17 trillion target. Rp 3.67 trillion had come from the sale of its fixed assets, Rp 5.51 trillion from the recovery of bank non-performing loans (NPLs) under its management, and the remainder from other revenue sources.

Around Rp 5.59 trillion is expected to be earned from the sale of its 45 percent stake in the publicly listed auto giant PT Astra International, along with the recovery of NPLs and the selling of the government bank recapitalization bonds.

"IBRA will be able to meet its Rp 17 trillion revenue target in the current 1999/2000 budget year (ending this month)," Bambang said. (rei)