Unrecoverable bank loans in Aceh may reach Rp 1.6t: Bank Indonesia
Rendi A. Witular, The Jakarta Post, Jakarta
Potential lending losses suffered by local banks as a result of the earthquake and tsunami in Aceh and North Sumatra may reach up to 50 percent of the total lending channeled in the areas, a senior central bank official said.
Bank Indonesia Governor Burhanuddin Abdullah said on Thursday the unrecoverable loans in those area might reach between Rp 1.6 trillion (US$177 million) and Rp 2 trillion, of the Rp 4 trillion total loans channeled by local banks.
"While banking services are now functioning almost normally in Aceh, we have received reports that unrecoverable loans in the areas could be between 40 percent and 50 percent of total lending," said Burhanuddin after attending the tsunami summit on Thursday.
He said the central bank was considering whether to entirely or partly write off the unrecoverable loans for humanitarian reasons, or to extend the payment of the lending period.
"We are still working on the settlement options for the loans. We expect to get the result soon after we come back from Aceh later this week to asses the losses," he said.
The loans cannot be easily recovered either because the debtors were killed in the disaster, or the assets used as collateral for the loans were destroyed.
No specific details are available as to which banks were damaged in the disaster.
Bank Mandiri said its unrecoverable loans in Aceh might reach up to Rp 35 billion, or 4 percent of its total lending channeled in the area, which was about Rp 800 billion.
Another lending giant, Bank Negara Indonesia (BNI), has reported it may not be able to recover some Rp 11 billion of its lending, or 2 percent of about Rp 535 billion in total loans in the area.
Bank Rakyat Indonesia (BRI) reported some Rp 23.6 billion of potential unrecoverable loans in the areas. The bank has a total portfolio of about Rp 620 billion in Banda Aceh alone, the capital of Aceh province.
Bank Mandiri, BNI and BRI are owned by the state and are the country's largest, third largest and fourth largest banks, respectively, in terms of assets.
The Association of State Banks estimated that the unrecoverable loans in the affected areas may reach Rp 60 billion.
Aside from the three banks, there are other six banks that operate in Aceh.
They are Bank Danamon, Bank Internasional Indonesia (BII), Bank Central Asia (BCA), Bank Bukopin, Bank Syariah Mandiri and Bank BPD Nanggroe Aceh Darussalam.
Only Bank Danamon, BII and BCA have yet to fully resume their operations in Aceh since the tragedy.