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BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future I B R A 3 rd Forum on Asian Insolvency.

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Presentation on theme: "BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future I B R A 3 rd Forum on Asian Insolvency."— Presentation transcript:

1 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future I B R A 3 rd Forum on Asian Insolvency Reform (FAIR) Seoul, Korea, November 2003 The Indonesian Bank Restructuring Agency

2 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 1 Agenda : Overview Performance to Date Plans for Going Forward Economic Crisis and Banking Sector Vision & Mission IBRA's Scheme Macro Economic Indicators Indonesian Banking Landscape Pre and Post Crisis Bank Restructuring Unit (BRU) Asset Management Credit (AMC) Asset Management Investment (AMI) Contribution to Fiscal Support Economics Policy Package after IMF Termination Recently Closed Transactions Timeline of Remaining Disposal Programs in 2003 Lippo Bank & BII Disposal Plan Investment Asset Disposal Program (PPAI 3) Closure of IBRA

3 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 2 Economic Crisis and Banking Sector Vision & Mission IBRA's Scheme Overview Plans for Going Forward Performance to Date

4 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 3 Economic Crisis: started with drastic devaluation of Rupiah, followed by banking and economic crisis In mid 1997 Rupiah drastically depreciated following the depreciation of regional currencies Rupiah depreciation led to liquidity crisis and in turn banking crisis Banking crisis led to Bank Run (Rush) In mid 1997 Rupiah drastically depreciated following the depreciation of regional currencies Rupiah depreciation led to liquidity crisis and in turn banking crisis Banking crisis led to Bank Run (Rush) Government Response In order to install trust in the banking system, the government issued blanket guarantee program In order to prevent capital flight, very high interest policy was put in place that led to the collapsed of the real sector Lender of the last resort function of The Central Bank was executed IBRA was established in January 1998 In order to install trust in the banking system, the government issued blanket guarantee program In order to prevent capital flight, very high interest policy was put in place that led to the collapsed of the real sector Lender of the last resort function of The Central Bank was executed IBRA was established in January 1998 Economic Crisis and Banking Sector

5 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 4 Bank Restructuring and Divestment Consolidate, restructure, and divest IBRA administered banks. Support Government in preparation for the establishment of Financial Services Authority and Deposit Insurance Corporation. Loan Restructuring and Disposal Conduct Loan Assets Sales Program (PPAK). Finalize ATK administration problem. Accelerate restructuring and follow up litigation cases. HoldCos establishment process and/or asset securitization process. Shareholder Asset Settlement Shareholder settlement of frozen banks, closed banks and taken over banks (BBO, BBKU, BTO). Former shareholders assets possession by IBRA Continue asset sales of former shareholders. IBRA Vision To build a strong Government Agency in supporting the Indonesian economic recovery IBRA Mission To promote economic recovery through banking sector and corporate debt restructuring and to optimize the recovery of government funds in order to alleviate the burden of the recapitalization bonds on the Government budget

6 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 5 IBRA's Scheme I B R A FAILED BANK "Non IBRA Affairs" "IBRA Affairs" Shareholder Settlement Shareholder Settlement Investment Investment AMI Bank Shares Divestment Bank Shares Divestment Interbank Interbank BRU NPL NPL Non Core Asset Non Core Asset AMC Non Performing Loan Bank Shares Recap Bonds Rp T Guarantee Rp T BI Liquidity Assistance Rp T Shareholder Settlement Program Rp TRp TRp T MoF Advancement Rp. 4.9 T Marketable Securities Treasury Rp T Notes : as of August 2003 (Finance Accounting) NPL NPL Litigation Rp T

7 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 6 Overview Plans for Going Forward Performance to Date Indonesian Macro Economic Indicators Indonesian Banking Landscape Pre & Post Crisis Bank Restructuring Unit (BRU) Asset Management Credit (AMC) Asset Management Investment (AMI) Contribution to Fiscal Support

8 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 7 ….inflation rate is decreasing significantly after 1997 economic crisis... … while exchange rate is stabilizing continuously … short term interest rate is steadily declining... Indonesian Macro Economic Indicators … interest rate spread is moving from negative during the crisis to positive spread... Source: Bank Indonesia

9 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 8 Indonesian Banking Landscape Pre and Post Crisis Massive bank runs and loan defaults forced closure of commercial banks *Almost half of private domestic banks were either closed or taken over by the government 72 banks failed, then administered by IBRA * The Commercial Banks in Indonesia Number of banks Banks under IBRA Number of banks 1997 Failed Banks Closed Recap & Merged to Danamon and PermataBank BCA Niaga Recap- italized JV and foreign Public domestic Private domestic JV Foreign

10 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 9 Banks Indicators under IBRA …..in general, banks performance have been improving, especially on CAR, NPL and LDR.... Note : - June 2003 figures are unaudited report Bank Restructuring Unit After BCA, Bank Niaga in April and November 2002, and Bank Danamon in July 2003, IBRA is currently proceeding with divestment of Bank Lippo and Bank Internasional Indonesia.

11 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 10 Bank Restructuring Unit Divestment of IBRAs Bank Shares …..The divestment of IBRAs majority bank shares at BCA, Niaga Bank and Danamon Bank to Strategic Investor was mainly intended for continuous improvement of those Banks performance

12 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 11 Core Asset by type of obligor

13 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 12 Core Asset by Line of Business

14 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 13 Asset Management Credit (IDR. Trillion) CLS : Corporate Loan Sale CCAS : Corp. Core Asset Sale CULS : Corp. Unrestructured Loan Sale Loan Disposal PPAK : Loan Asset Disposal Program PPAK - PPL : Loan Asset Disposal Prog. - Direct Selling Program P3AK : Loan Asset Portfolio Disposal Program PPAS : Strategic Asset Disposal Program

15 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 14 Equity Divestiture Asset Management Investment

16 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 15 Contribution to Fiscal Support Since FY 1999/2000 til 2002 IBRA always able to meet its fiscal target... … FY 2000 (9-mo), 2001 and 2002 IBRA even surpassed the target Note : IBRAs achievement in 2003 is per Sept 2003

17 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 16 Overview Plans for Going Forward Performance to Date Economics Policy Package after IMF Termination Recently Closed Transactions Timeline of Remaining Disposal Programs in 2003 Lippo Bank & BII Disposal Plan Investment Asset Disposal Program (PPAI 3) Closure of IBRA

18 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 17 Economic Policy Package after IMF Termination IBRAs Tasks Financial Safety Net The Establishment of Deposit Insurance Agency (LPS) Bank Divestment & Other Asset Disposal Programs Divestment of IBRA's Majority Bank Shares Divestment of Credit Assets, Equity and Quasi Equity (PPAS & PPAK) Divestment of Property Assets (PPAP) Divestment of Share Holders Assets (PPAI)

19 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 18 Recently Closed Transactions Loan Asset Disposal Program (PPAK 4)26 Sept Block Sale 20% of Bank Niaga shares16 Sept Strategic Asset Sale Program (PPAS) 219 Sept Investment Asset Sales Program (PPAI) 3 Batch 124 Sept Treasury Asset (PPSBM) 317 Sept

20 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 19 June JulyAugSeptOctNov Dec JanFeb 2004 Timeline of Remaining Disposal Programs in % share divestment of Bank Lippo Conclude all remaining transactions & prepare for IBRA closure 51% share divestment of Bank BII Investment Asset Sales Program 3 (Batch 2 : Share & Receivable) (Batch 2 : Share & Receivable) Property Asset Sales Program 4 (Batch 1 - Batch 5) (Batch 1 - Batch 5) Ongoing JV Property

21 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 20 The offered assets in Investment Asset Disposal Program Phase 3 (PPAI 3) are mostly Shares,Convertible Bond, Receivables in companies and Properties directly or indirectly owned by IBRA Investment Asset Disposal Program (PPAI 3) Assets Offered on PPAI 3 Batch 2

22 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 21 IBRA plans to dispose its 52.04% stake in Bank Lippo via strategic sale and 71% of its shares in BII via strategic sale (51%) and market placement (20%) Strong in trade financing and consumer banking (card business) –BII is one of the leading credit card operator in Indonesia (currently aggregates to over and controls 30% of market share) and is well positioned to become one of the leading domestic consumer banking franchise (customer base in excess of 2 million) The best funding structure in the industry. Its low-cost fund (checking and saving accounts) comprised 70% of its total funding, compared to the industry average at 40% –Bank Lippo enjoyed low-cost of fund from its checking and saving accounts. –One of the leading ATM service providers in Indonesia with a network of over 600 ATMs Banks Shares Disposal Program

23 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 22 Ongoing Joint Venture Program for Property IBRA plans to dispose its property assets in several main locations in Jakarta and Surabaya via Joint Venture program, during October January 2004

24 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 23 Bank Restructuring Asset Settlement Recovery of State Funds Administration of Deposit Insurance Program No more Recapitalization Program Most of the Bank Divestment Programs are Completed. Minority Ownership at banks 50% of Asset has been Restructured The Remaining Assets still 20% Accumulated Contribution (Cash & Bond) is IDR 140 trillion No More Banks Closed for the last two years No More New Claims Establishment of Holding Companies to Manage Remaining Assets of IBRA Establishment of Deposit Insurance Agency IBRA'S TaskAchievement Near Future Plan IBRA's Task Achievement and Future Plan Closure of IBRA

25 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 24 Flow of IBRA's Remaining Assets Type of Asset Divestment Program Remaining Assets Management Plan Real/Fixed Asset Financial Asset: Loan, Equity & Quasi equity Bank Shares Property Asset Sales Program Loan Assets Sales Program, Investment Assets Sales Program & Strategic Assets Sales Program Bank Divestment Holdco Property Holdco- Non Property- Loan Assets Holdco-Non Property- equity Property Assets Property Compaies Equity Loan Equity, Quasi Equity Remaining Bank Share Closure of IBRA

26 BPPN Badan Penyehatan Perbankan Nasional The Indonesian Bank Restructuring Agency (IBRA) IBRA : Bridging The Future 25 I B R A The Indonesian Bank Restructuring Agency For further information please visit our website :


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