Tiara to offer rights shares

JAKARTA (JP): The publicly listed Bank Tiara will launch an offering of rights shares later this month to raise fresh funds of around Rp 75 billion (US$34.88 million).

The bank's president Hendrick Kolonas said yesterday that around 75 million new shares would be issued during the limited public offering, which would be held before the end of this month.

"Existing shareholders are entitled to buy one new share for each old share they hold at their par value of Rp 1,000 (45 U.S. cents)," he told investors and securities analysts at the company's presentation here.

Bank Tiara, currently 33 percent owned by the investing public, recorded a capital adequacy ratio (CAR) of 14.2 percent as of Sept. 30, far above the minimum standard of eight percent set by Bank Indonesia (the central bank).

But Hendrick said that the bank's financing capacity is still not enough to tap the promising potential in the lending market, which is expected to record a faster growth next year in line with the country's growing economic activities.

"We project an increase in our lending of between 60 percent and 80 percent next year," he said of the bank's business strategy in benefiting the growing lending market.

Hendrick said that an 80 percent increase in lending is not so significant when compared to the market's potential. "With an 80 percent rise, each of Bank Tiara's 15 branches will be capable of providing credits of only Rp 2 billion per month," he said of the promising opportunities in the country's lending market.

Bank Tiara, which mainly provides credits to the trade and manufacturing sectors, booked outstanding loans of around Rp 671 billion as of Sept. 30.

The bank's assets, which totaled around Rp 845 billion as of Sept. 30, is estimated to reach Rp 1.1 trillion by the end of this year, while its net profit, which reached around Rp 15 billion during the January-September period, is projected to break the level of Rp 20 billion this year.(hen)