September 20, 2005

Remaining Gov't Stake in BCA on Sale *Now*


BCA (BBCA.IJ) is suspended pending the government's sale of its final 5.02% stake in the bank, representing 618.24 million shares. The stock closed at IDR3475 today, and will be suspended until the sale takes place. Stock may be gone by Asia mornin open, so get 'em now if you'se wants 'em.

UPDATE: A very handsome man with a large prop book informs us that the deal is spoken for already via pre-arrangement...thanks for playing. Any complaints to J. Ackermann & Co.

UPDATE 2: Sold at 3550 vs. 3475 previous close...nice premium.

Posted by The Banker at 11:54 PM | TrackBack

September 06, 2005

A Curious Privatization


Indonesian State Minister for State Enterprises Sugiharto was reported in the press today as saying he favors the proposed acquisition of the government's stake in BTN (Indonesia's 8th-largest) by a consortium of state enterprises including state bank BNI and workers insurance company PT Jamsostek.

In addition to the openly-stated desire to avoid selling the bank to foreigners, the plan is curiously presented as "aimed to meet the privatization target." Selling a state bank to a non-transparent consortium of other state-owned enterprises (especially one led by BNI, the most hapless major bank in Indonesia) is not a privatization in our book.

Sugiharto was very clear about his motivations:

"The consortium comprises state companies through which the government would have full control over BTN. This is also aimed to prevent foreigh companies from taking over the bank," Sugiharto said in a hearing with the House of Representatives` commission on trade, industry and investment here on Monday.

Coming on the heels of the scandal at state-controlled Bank Mandiri, where the entire senior management team was removed for corruption in May of this year, we figured that the government would have lost its taste for the banking business. We hate to see Indonesia back to its old tricks, especially after the banking system has been a rare example of a comprehensive clean-up.

If the Indonesian government is serious about saving BTN, they should immediately cancel this plan and sell a minority stake with management control to a responsible banking entity - which, I am sorry to say, means a foreign bank or foreign-controlled domestic bank. We have seen how the other alternatives work out.

* Acquisition of BTN to Avoid Foreign Ownership (Antara)

Posted by The Banker at 09:19 PM | TrackBack

September 01, 2005

Can't teach an old dog new tricks?

Bank Mandiri held an investor meeting today to explain the 80% drop in 1H05 net income, as well as the appalling rise in gross NPLs from 7.1% of total loans at YE04 to 24.6% at mid-year. Management notes that BMRI's "current provisioning policy adheres to [Bank Indonesia] requirements," which is a big relief to us . This follows on the removal of Mandiri's senior management in May on allegations of corruption in lending. Although management can't seem to get borrowers to repay, they flag high loan growth as a positive.

Stock is down 14% (ex-currency) in last 10 sessions.

Deutsche calls this a "peak" for Mandiri's NPLs, and maintains a Hold after downgrading in June.

* Management presentation

Posted by The Banker at 07:21 PM