Tirtamas Group plans to merge its 3 banks

Tirtamas Group plans to merge its 3 banks

JAKARTA (JP): Tirtamas Group will consolidate its banking
business by merging its three banks -- Bank Pelita, Bank Papan
Sejahtera and Bank Kredit Asia -- into a single bank.

Tirtamas Group will retain the newly acquired Bank Niaga,
currently the seventh largest private bank in terms of assets, as
a separate bank, the business group said.

The move would strengthen synergy between the various banks
under Tirtamas Group in an anticipation of the globalization in
the financial services, it said.

The merger, if realized, would bring the combined assets of
the three banks to Rp 4 trillion (around US$1.3 billion) and
their equity to Rp 500 billion.

There were no details on which of the three banks would
survive, but analysts said it would likely be Bank Papan
Sejahtera, which is listed on Jakarta and Surabaya stock
exchanges.

Details of the merger are expected to be announced by
Tirtamas's chairman, Hashim Djojohadikusumo, within the year.

Hashim hinted at the merger plan when speaking to reporters
after Bank Niaga's extraordinary shareholders meeting last week.

He said the plan had been reported and approved by Bank
Indonesia, the central bank, and could be carried out this year.

"Details of the plan are still being considered," he said.

Bank Papan's director, Al Njoo, speaking on the same occasion,
said there would be no overlapping in business between Bank Niaga
and the new merger bank given that each had it own market
segment.

Bank Niaga, which is also listed on Jakarta and Surabaya stock
exchanges, would focus on commercial banking for people in the
middle-to-low income group while the other bank would concentrate
on home ownership loans, among others, he said.

Tirtamas Group controls 50 percent of Bank Niaga, 19.8 percent
of Bank Papan Sejahtera, and wholly owns Bank Pelita and Bank
Kredit Asia. Its other financial interests include a 20 percent
stake in Merril Lynch Indonesia securities company and 34 percent
equity in MetLife Sejahtera Insurance.

Hashim, a son of Indonesia's most senior economist Soemitro
Djojohadikusumo, acquired the majority stake in Bank Pelita from
Boediarto Boentaran, a local businessman in 1995.

The bank has since developed rapidly with major clients
including state electricity company PLN, Bakrie & Brothers and A
Latief Corporation. Its assets totaled Rp 813 billion at the end
of March.

Bank Kredit Asia, a foreign exchange trader bank, was
established in 1991 as Bank Tifa Mayora Sentosa. Its assets
totaled Rp 525 billion at the end of June.

Bank Papan Sejahtera, which lends mostly to the housing and
property sectors, booked Rp 1.9 trillion in assets at the end of
June.

Bank Pelita's president and chief executive officer Agus Anwar
said Hashim's business relations had lifted Bank Pelita's
performance, while Bank Kredit Asia president Syafril Nur said
the performance of the three banks was boosted after Hashim's
acquisition.

Tirtamas, the majority shareholder in publicly listed PT Semen
Cibinong, has five core businesses: cement, financial services,
oil and petrochemicals, international trading and agribusiness.

It also has stakes in Paiton Power Co, which is building a
1,200 Megawatt coal-fired power plant in East Java, the Adaro
coal mining operation in South Kalimantan; and PT Indonesia Bulk
Terminal, which operates a coal terminal and port in South
Kalimantan.

In the petrochemical sector, Tirtamas is developing what is
billed as Indonesia's largest integrated olefin and aromatics
complex in Tuban, East Java.

Its trading arm, Tirtamas Comexindo, has a network of
affiliated companies and representative offices in 28 countries
with $400 million in annual turnover.

The group also operates more than 200,000 hectares of tea and
oil palm estates. (08)