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Mutiara eyes higher value after joining ATM network

Publicly listed lender PT Bank Mutiara is expecting its decision to join the Automatic Teller Machine (ATM) network belonging to the country’s largest-private lender, PT Bank Central Asia (BCA), will help to increase its value, which will in turn attract investors to make bids to take the bank over from the Deposit Insurance Agency (LPS)

Raras Cahyafitri (The Jakarta Post)
Jakarta
Tue, April 3, 2012

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Mutiara eyes higher value after joining ATM network

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ublicly listed lender PT Bank Mutiara is expecting its decision to join the Automatic Teller Machine (ATM) network belonging to the country’s largest-private lender, PT Bank Central Asia (BCA), will help to increase its value, which will in turn attract investors to make bids to take the bank over from the Deposit Insurance Agency (LPS).

Mutiara signed on Monday an agreement with PT Rintis Sejahtera, which manages the Prima ATM network, in which BCA has been linking its ATMs with other lenders. The agreement will allow Mutiara’s customers to use banking services at 34,600 ATMs in the Prima ATM network, which includes more than 8,500 BCA ATMs nationwide.

“This is a strategic agreement, which will allow the holders of Mutiara’s 193,000 accounts to use the network. This is also one of our efforts to increase the value of Mutiara, as the network will benefit our customers,” Mutiara president director Maryono said.

Currently, Mutiara has 244,000 customers in total. The bank has 61 ATM machines with transactions reaching 45,000 per month.

“In the near future, Mutiara’s customers will also be able to use their ATM cards as a debit card. Many of our customers are also BCA customers,” Maryono said.

Maryono added that the agreement would help his company to increase its low-cost fund and fee-based income. He said Mutiara was targeting a 50 percent increase in deposits transactions and a 24 percent increase in fee-based income to Rp 120 billion this year from Rp 97 billion in 2011.

According to Maryono, Mutiara, formerly known as Bank Century, reported significant improvements in the last three years, after the bank was taken over by LPS in 2008 following a government bailout of
Rp 6.76 trillion.

Maryono said Mutiara currently had Rp 13.1 trillion in assets as of the end of December 2011, increasing by 135 percent from 2008. The company’s total credits stood at Rp 9.4 trillion with a nonperforming loans (NPL) rate of 3.9 percent.

“In the first quarter of the year, lending was about Rp 9.8 trillion and third-party funds at about Rp 11.5 trillion. Our assets are worth Rp 13.3 trillion and the NPL rate is standing at 3.9 percent,” Maryono said.

Maryono said the bank aimed to achieve a 23 percent increase in lending. The bank, according to Maryono, is planning to open five new branches in Central Java, West Java, Medan (North Sumatra) and Makassar (South Sulawesi) as well as establishing between 10 and 15 new ATM machines. The bank would also allocate Rp 15 billion to Rp 30 billion in capital expenditure this year, Maryono added.

LPS has to repair and sell Mutiara within three to five years of the acquisition for at least the price the agency paid in 2008.

“The acquisition, which cost Rp 6.7 trillion, was about 35 percent of LPS’ assets at that time. We’ve been working to increase the bank’s value so that we can sell it. We have until 2013 to sell the bank for at least the price we paid for it and in line with market prices thereafter,” LPS board of commissioners’ chairman, Heru Budiargo, said.

Heru said that about 10 investors have submitted applications to take over Mutiara. LPS opened an offer period for Mutiara’s sale in February 2011 and will close the period by the end of April 2012.

“We hope the chance of selling Mutiara will be better than last year, as the bank has improved in both financial and nonfinancial sectors,” Heru said.

Last year, nine investors expressed an interest in buying Mutiara but all of them failed.

BCA president director Jahja Setiaatmadja said his bank would not be making a bid for Mutiara as it focused on organic growth.

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