[Kabar-indonesia] BI upbeat LDR will increase despite tough challenges ahead

[Joyo at aol.com]

also: Retail bond sales rescheduled to Aug. 2

The Jakarta Post 
Saturday, July 1, 2006

Bank Indonesia upbeat LDR will increase despite tough challenges ahead

The Jakarta Post, Jakarta

The central bank is upbeat that the loan to deposit ratios of commercial 
banks will continue to increase this year from last year's level of 53.2 percent, 
despite continuing high interest rates and non-performing loan (NPL) levels.

Bank Indonesia's regulatory director, Muliaman D. Hadad, said after a seminar 
on banking regulation Friday that bank lending had grown at a stable rate 
during the first five months of this year.

"Lending will continue growing to the end of the year," he said. While he did 
not provide any figures, loan disbursements up to the end of May totaled Rp 
730 trillion (US$79.3 billion), according to central bank data.

Muliaman also refrained from stating the central bank's year-end LDR target.

In 1999, after the Asian economic crisis, the average LDR plunged to 26.2 
percent from 72.4 percent in 1998 as lending dried up. The ratio has been slowly 
climbing since then, and reached 53.2 percent as of the end of last year.

Bank Indonesia deputy governor Maman Sumantri said that the national banking 
industry had been able to maintain stability and book decent performances 
despite the external pressures exerted by rising world fuel prices since the third 
quarter of 2005.

He said that the banking industry's achievements to date were shown by a 
sound average capital adequacy ratio (CAR) of 21.5 percent as of the end of April 
2006. He added that the industry was benefiting from adequate liquidity and 
stable profitability, "although a few banks are still under pressure."

Maman noted that the risks to the banking sector were heightened by the 
current high interest rates and increasing NPL levels.

Gross NPLs climbed to 10 percent in April from 9.4 percent in March. April's 
net NPLs stood at 6.4 percent, compared to March's 5.6 percent.

In 2005, gross NPLs stood at 8.3 percent, while net NPLs were 4.8 percent.

The central bank has kept its key rate unchanged at 12.5 percent since 
cutting it for the first time since December by a quarter percentage point in June. 
The BI rate increased from 8.5 percent in July last year to 12.75 percent in 
December to help keep a rein on inflation -- which had surged to 17.11 percent 
by the end of last year.

The central bank has hinted on a number of occasions that it might lower its 
key rate again in July with a view to bringing it down to a year-end level of 
11 percent, while inflation is expected to ease to around 8 percent.

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The Jakarta Post 
Saturday, July 1, 2006

Retail bond sales rescheduled to Aug. 2

Urip Hudiono, The Jakarta Post, Jakarta

The government has postponed its plan to offer Indonesian retail bonds for 
the first time ever to individual investors until August, the Finance Ministry 
said, to give more time for the appointed sales agents to promote the bonds to 
potential investors.

However, it added it was still upbeat that the "Indonesian Retail Bond 001", 
or "ORI001", would be a market hit, and said it was eyeing an indicative 
target of Rp 2 trillion (US$215 million) in proceeds, and considering regular 
reofferings in the future.

The Finance Ministry's director for government bond management, Rahmat 
Waluyanto, said Friday that the initial offer of the three-year bonds would be 
delayed until Aug. 2, from the previously scheduled July 28, following requests 
from sales agents for more time to make preparations.

The Finance Ministry has appointed 11 sales agents -- 8 banks and 3 
securities firms -- to sell the bonds to retail investors. The central bank previously 
appointed 13 sub-registry agencies to help administer trade in the bonds.

The quotas to be allocated to each sales agent have yet to be determined, 
however, pending the submitting by each of the details of expected investor 
demand, Rahmat said.

To buy the retail bonds, interested investors simply have to open accounts 
with a sales agent and with a sub-registry agency. The minimum amount of bonds 
-- denominated in multiples of Rp 1 million -- that an investor can purchase is 
Rp 5 million, but this is subject to the quotas set for each sales agent.

More information on the bond offer can be found at: 
http://www.dmo.or.id/publikasi/Brosur_ORI_new.pdf

Sales agents: Sub-registry agencies:

1. Bank Mandiri 1. Bank Mandiri

2. Bank Pan Indonesia 2. Bank Negara Indonesia

3. Valbury Asia Securities 3. Bank Rakyat Indonesia

4. Bank NISP 4. Bank Central Asia

5. Bank Bukopin 5. Bank Internasional Indonesia

6. Bank Permata 6. Bank Permata

7. Danareksa Sekuritas 7. Bank Niaga

8. Citibank 8. Citibank

9. Bank Mega 9. Deutsche Bank
10. Trimegah Securities 10. HSBC
11. Bank Danamon Indonesia 11. Bank Danamon Indonesia

12. Standard Chartered Bank

13. Kustodian Sentral Efek Indonesia

Source: Finance Ministry 

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Joyo Indonesia News Service
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