Technical aid extended to Continental Bank
Technical aid extended to Continental Bank
JAKARTA (JP): The technical assistance extended to Continental
Bank from a consortium of three other banks may lead to a take-
over, say executives.
Executives of the consortium, comprising of Bank Utama, Bank
Danamon and Bank Central Asia, said yesterday that the technical
assistance could be expanded into another agreement on financial
assistance or equity injection.
"The present stage of the cooperation is still limited to
technical assistance. But the possibility of taking over the
Continental Bank is still there," said Jusuf Arbianto, managing
director of Bank Danamon.
Yusuf said that his bank and the other two banks were invited
by the Continental Bank to improve its management and "as
friends, we agreed to do so."
Speaking to newsmen following his presentation in a two-day
seminar on banking ethics held by the Association of Private
Domestic Banks (Perbanas), Yusuf said the technical assistance
extended to the Continental Bank was different from that extended
to Bank Sampoerna.
Bank Danamon previously used the technical assistance as a
bridge for taking over the ailing Bank Sampoerna, formerly owned
by the Sampoerna Group.
Trenggono Purwosuprodjo, the president of Bank Utama, also had
the same view about the technical assistance for the Continental
Bank.
Team
He said the cooperation agreement with the Continental Bank is
limited only to technical assistance and that the consortium had
set a special team comprising of 25 skilled personnel to carry
out the assistance.
A reliable source, however, said that they believed the
technical assistance could be used as camouflage for takeover
arrangements towards the Continental Bank.
The sources, who requested for anonymity, said that the owner
of the Continental Bank is likely to sell his shares in the bank
to solve his business group's financial difficulties.
Sugiantoro, the president of the Continental Bank, told The
Jakarta Post earlier that Lily Sumantri, the major shareholder of
the bank, is an independent businessman and that he has no
relations with any business group.
According to the sources, Sumantri is the owner of the
Continental business group, which incurred a huge amount of debt
in the ailing Bank Bapindo.
Sugiantoro said that the Continental Bank, with total assets
of around Rp 509 billion (US$242.38 million) as of March, has a
capital adequacy ratio (CAR) of above eight percent, the minimum
level set by Bank Indonesia (the central bank).
The bank's loan-to-deposit ratio (LDR) is around 111 percent,
a little bit higher than the maximum level of 110 percent set by
Bank Indonesia.(hen)