The ongoing bailout of Bank Century, totaling Rp 6.76 trillion (US$666 million), seems to have reached an end, as indicated by the financial institution's recent turnaround, says the central bank.
"It seems so ... because the bank has now registered profits," Bank Indonesia (BI) senior deputy governor Darmin Nasution said Thursday after a hearing with legislators, when asked whether the Rp 6.76 trillion bailout had restored Century's health.
BI, along with the Finance Ministry and the Deposit Insurance Corporation (LPS), were summoned Thursday by the House of Representatives' commission XI overseeing financial affairs in relation to the huge bailout funds used to help the previously ailing bank.
On Nov. 20, BI declared Century a failed bank after its capital adequacy ratio (CAR) plunged to negative 153 percent, far below the central bank's minimum tolerance of 8 percent.
The Financial System Stability Committee (KSSK) comprising the BI, the Finance Ministry and the LPS, then appointed the LPS to take over Century in fear the bank's collapse might cause a rush on banks, affecting five banks of a similar size and 18 peer banks, said Darmin.
On Nov. 23 last year, the LPS injected Rp 2.78 trillion in funds, followed by Rp 2.2 trillion on Dec. 5, Rp 1.12 trillion on Feb. 3 and Rp 630 billion on July 21, which amounted to Rp 6.76 trillion in total.
For now, the bailouts have revived the struggling Century. As of July 31, Century registered Rp 199.48 billion in unaudited profits, up from Rp 140 trillion reported on June 30.
Meanwhile, the bank's CAR reached 9.28 percent on July 31, up from 8.25 percent on June 30.
Despite Century's improvement, legislators questioned BI, the Finance Ministry and the LPS in a heated debate regarding their decision to keep pouring funds into the financial institution.
"The money belongs to the people, from the fees they paid *as deposit guarantees*. The LPS has never revealed the exact figure to us," said Harry Azhar Aziz.
Dradjad H. Wibowo said the government, BI and the LPS had not been transparent.
"We did not know how bad the conditions were. We don't want to point fingers, but we expect the government and BI to fix this in the future," he said.
