Bank Mutiara books positive growth after bailout

The Jakarta Post ,  Jakarta   |  Thu, 11/26/2009 6:45 PM  |  Business

Bank Mutiara, formerly Bank Century, recorded Rp 231 billion (US$24.49 million) in net profit in October, over a year after it was declared a failed bank and put under Bank Indonesia's special treatment.

Bank Mutiara President Director Maryono said on Thursday that the bank’s losses reached Rp 7.28 trillion in December 2008, just before BI came to the rescue and the bank secured Rp 6.7 trillion in bailout fund.

"The bailout has helped us raise the bank's profit up to 3,000 percent," Maryono told a media conference.

By the end of 2008, then Bank Century’s capital adequacy ratio stood at minus 22.29 percent. As of October of this year the ratio has leaped to 10.07 percent.

Maryono said the change in the bank’s name early in October helped it regain the public trust.

"As of October, public funds deposited in our bank reached Rp 5,81 trillion, meaning that we have gained Rp 692 billion in new deposits since December 2008," Maryono said.

In late 2008, the bank failed to maintain positive equity and its CAR plunged up to minus 130 percent.

In September 2008, Bank Indonesia put the troubled bank into special treatment program, and handed over the management of the bank to the Deposit Insurance Corporation (LPS).

The LPS managed to disburse bailouts worth Rp 6.7 trillion to the bank to help it recover its liquidity.

Many suspect, however, the bailout was linked to certain political parties that used the fund to finance their campaigns ahead of the 2009 elections. The House of Representatives will decide on Dec. 1 whether to launch an inquiry into the scandal. (bbs)

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