Govt may postpone BII offering until next year

The Jakarta Post , Jakarta | Thu, 09/14/2006 8:58 AM | Business

Urip Hudiono, The Jakarta Post, Jakarta

The government may postpone a planned offering of its 5.49 percent stake in Bank International Indonesia (BII) until next year, an official from the state-sanctioned Asset Management Company (PPA) said Wednesday.

The PPA, which manages state holdings at banks taken over during the 1997 Asian financial crisis, will instead focus on offering the government's 28.39 percent share in Bank Tabungan Pensiunan Nasional (BTPN), PPA president Mohammad Syahrial said Wednesday.

""It (the BII sale) is still a long way, maybe next year,"" Syahrial said.

He said the PPA would go ahead with the BTPN sale, in line with plans by the bank's management to hold an initial public offering by the end of this year.

""If the IPO can be done more quickly, then we can offer (the shares) at the same time,"" Syahrial said.

PPA had been expected to offer the BII shares soon after its Rp 1.75 trillion (US$192 trillion) sale last week of the government's 25.9 percent stake in Bank Permata.

The management company earlier said it planned to sell both the Permata and BII shares by the end of this year, to help finance the state budget deficit. It appointed local securities house Bahana Securities and German-based Deutsche Bank AG as the underwriters and financial advisors for the sales.

The government is expecting Rp 2.38 trillion in sales proceeds from the PPA this year.

BII, currently the country's sixth largest lender by assets, reported a second-quarter 11 percent decline in net profit to Rp 352 billion on rising provisioning costs. This decline was despite a 24 percent increase in its net interest income to Rp 1.39 trillion, on the back of a 21 percent increase in lending to Rp 23.18 trillion. The bank's assets totaled Rp 47.56 trillion.

BII's shares have been tracking the market's recent bullish trend, although they closed down 2.5 percent at Rp 190 on Wednesday.

Sorak Financial Holdings Pte. Ltd., a consortium of Korean Kookmin Bank and the Singaporean government's Temasek Holdings, controls 56.5 percent of BII.

BTPN's shareholders include local fund management firms PT Recapital Advisors (22.61 percent), PT Danatama Makmur (19 percent) and PT Bakrie Capital Indonesia (10 percent), and haj business tycoon Fuad Hasan Masyhur (20 percent).

The bank, whose customer focus is retired soldiers and civil servant, reported a first quarter 5.8 percent increase in net interest income to Rp 761 billion.

BTPN president Paulus Winarto said in July there were plans to offer up to 20 percent of the bank through an IPO, through which he expected to raise Rp 300 billion.

Asset Management Company also oversees the government's 2.35 percent stake in Lippo Bank, 6.08 percent in Maybank Indocorp and a 0.0005 percent stake in Bank Panin. It also plans to sell 400 property assets this year.

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