Three local banks agree to help Continental Bank
Three local banks agree to help Continental Bank
JAKARTA (JP): Continental Bank will get technical assistance
from a consortium of three domestic banks to enable it to compete
in the tight banking market, says an executive.
Continental Bank's president, Sugiantoro, said yesterday that
the technical assistance agreement with the consortium comprising
of Bank Utama, Bank Central Asia and Bank Danamon is "purely"
related to banking know-how.
"We want to grow faster... We, therefore, should have more
advanced technology," he told The Jakarta Post when he was asked
whether the technical assistance was made as an initial step of
the consortium to take over the bank.
A number of local banks have used technical assistance as a
bridge to acquire ailing banks, such as Bank Danamon's assistance
to Bank Sampoerna, which was formerly owned by the Sampoerna
Group.
Sugiantoro also denied that the technical assistance was an
effort to help Continental Bank's financial difficulties,
pointing out that the bank's financial condition is within the
healthy category set by Bank Indonesia (the central bank).
He said that Continental Bank, with total assets of around Rp
509 billion (US$242.38 million) as of March this year, has a
capital adequacy ratio (CAR) of above eight percent, the minimum
level set by Bank Indonesia.
"Our loan-to-deposit ratio is around 111 percent, a little bit
higher than the maximum level of 110 percent set by the central
bank," he said.
He said that the technical assistance to be provided by the
consortium would cover the transfer of technology in such aspects
as human resource development, lending and operational networks.
"Bank Utama has good lending expertise, Bank Central Asia is
known for its good operational network, while Bank Danamon is
good in human resource development," he explained the reasons
behind the cooperation with the three banks.
The government has appealed small banks to merge to enable
them to survive amid the fierce competition in the banking
industry.
Minister of Finance Mar'ie Muhammad warned recently that the
government would issue a ruling to force them to merge if they
would not heed the appeal. (hen)