0. 3rd Forum on Asian Insolvency Reform (FAIR)
I B R A
The Indonesian Bank Restructuring Agency
3rd Forum on Asian Insolvency Reform (FAIR)
Seoul, Korea, November 2003

1. Agenda : Overview Performance to Date Plans for Going Forward
Economic Crisis and Banking Sector
Vision & Mission
IBRA's Scheme
Performance to Date
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
Plans for Going Forward
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

2. Plans for Going Forward
Performance
to Date
Overview
Economic Crisis and Banking Sector
Vision & Mission
IBRA's Scheme

3. Economic Crisis and Banking Sector
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)
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

4. To build a strong Government Agency
IBRA Vision
To build a strong Government Agency
in supporting the Indonesian economic recovery
Bank Restructuring
and Divestment
Loan Restructuring
and Disposal
Shareholder Asset
Settlement
Consolidate, restructure, and divest IBRA administered banks.
Support Government in preparation for the establishment of Financial Services Authority and Deposit Insurance Corporation.
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 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 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

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

6. Plans for Going Forward
Performance
to Date
Overview
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

7. Source: Bank Indonesia
Indonesian Macro Economic Indicators
….inflation rate is decreasing significantly after 1997 economic crisis ...
… while exchange rate is stabilizing continuously
… short term interest rate is steadily declining ...
… interest rate spread is moving from negative during the crisis to positive spread ...
Source: Bank Indonesia

8. The Commercial Banks in Indonesia
Indonesian Banking Landscape Pre and Post Crisis
Massive bank runs and loan defaults
forced closure of commercial banks
72 banks failed, then administered by IBRA
The Commercial Banks in Indonesia
Number of banks
Banks under IBRA
Number of banks
238 72 52
164
151
JV and
foreign 44
Foreign 40 10
Public
domestic JV 34 38 15 43 46 3
Private
domestic
160
81* 57 2
1997
1999
2000
Failed
Banks
Closed
Recap & Merged to
Danamon
and
PermataBank
Recap-
italized
BCA
Niaga
*Almost half of private domestic banks were either closed or taken over by the government

9. Bank Restructuring Unit
Banks Indicators under IBRA
…..in general, banks performance have been improving, especially on CAR, NPL and LDR....
Berdasarkan tiga indikator bank (CAR, NPL dan LDR) menunjukan pada akhir tahun 2002 bank-bank rekap di bawah kelolaan BPPN menunjukkan kinerja yang sehat dan rata-rata terus mengalami perbaikan.
Memang saat ini penerimaan bunga dari bank-bank rekap sebagian berasal dari Obligasi rekapitalisasi, namun sejauh ini bank-bank tersebut terus meningkatkan penerimaannya dari kredit kepada pihak ketiga, hal ini terlihat dengan adanya peningkatan LDR (meskipun belum maksimal) dari Bank-bank tersebut. Usaha ini juga sekaligus secara bertahap menurunkan ketergantungan pendapatan bank dari Obligasi rekapitalisasi.
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.
Note :
- June 2003 figures are unaudited report

10. Bank Restructuring Unit
Divestment of IBRA’s Bank Shares
…..The divestment of IBRA’s majority bank shares at BCA, Niaga Bank and Danamon Bank to Strategic Investor was mainly intended for continuous improvement of those Banks’ performance

11. Core Asset by type of obligor

12. Core Asset by Line of Business

13. Asset Management Credit
Loan Disposal
(IDR. Trillion)
CLS : Corporate Loan Sale
CCAS : Corp. Core Asset Sale
CULS : Corp. Unrestructured Loan Sale
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

14. Asset Management Investment
Equity Divestiture

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 : IBRA’s achievement in 2003 is per Sept 2003

16. Plans for Going Forward
Performance
to Date
Overview
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

17. Economic Policy Package after IMF Termination
IBRA’s 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 Holder’s Assets (PPAI)

18. Recently Closed Transactions
Loan Asset Disposal Program (PPAK 4) 26 Sept
Block Sale 20% of Bank Niaga shares 16 Sept
Strategic Asset Sale Program (PPAS) Sept
Investment Asset Sales Program (PPAI) 3 Batch Sept
Treasury Asset (PPSBM) Sept

19. Timeline of Remaining Disposal Programs in 2003
2004
June
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
51% 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)
Property Asset Sales Program 4
(Batch 1 - Batch 5)
Ongoing JV Property

20. Investment Asset Disposal Program (PPAI 3)
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
Assets Offered on PPAI 3 Batch 2

21. Bank’s Shares Disposal Program
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

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

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

24. Property Compaies Equity
Closure of IBRA
Flow of IBRA's Remaining Assets
Type of Asset
Divestment
Program
Remaining Assets
Management Plan
Real/Fixed
Asset
Property Asset
Sales Program
Holdco
Property
Property Assets
Property Compaies Equity
Financial Asset:
Loan, Equity &
Quasi equity
Loan Assets Sales
Program,
Investment Assets
Sales Program &
Strategic Assets
Sales Program
Holdco-
Non Property-
Loan Assets
Loan
Equity , Quasi Equity
Bank Shares
Bank
Divestment
Holdco-Non
Property-
equity
Remaining Bank Share

25. The Indonesian Bank Restructuring Agency
For further information please visit our website :
I B R A
The Indonesian Bank Restructuring Agency