I B R A

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I B R A
The Indonesian Bank Restructuring Agency
3rd Forum on Asian Insolvency Reform
(FAIR) Seoul, Korea, 10-11 November 2003
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Agenda
Overview
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
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Plans for Going Forward
Performance to Date
Overview

• Economic Crisis and Banking Sector
• Vision Mission
• IBRA's Scheme

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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

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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
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IBRA's Scheme
Recap Bonds Rp. 425.5 T
Guarantee Rp. 73.8 T
BI Liquidity Assistance Rp. 144.5 T
MoF Advancement Rp. 4.9 T
"Non IBRA Affairs"
FAILED BANK
Non Performing Loan
Shareholder Settlement Program
Bank Shares
I B R A
"IBRA Affairs"

• Shareholder Settlement
• Investment

• Bank Shares Divestment
• Interbank

• NPL
• Non Core Asset

Marketable Securities

• NPL

Treasury
AMC
Litigation
AMI
BRU
Rp. 13.50 T
Rp. 130.72 T
Rp. 123.34 T
Rp. 361.19 T
Rp. 65.81 T
Notes as of August 2003 (Finance Accounting)
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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

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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
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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
Banks under IBRA Number of banks
The Commercial Banks in Indonesia Number of banks
238
72
52
164

151
JV and foreign

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Foreign
40
10

JV
Public domestic
34
15
38


43

3
46
Private domestic

160
81
2
57
1997
1999
2000
Failed Banks
Closed

• BCA
• Niaga

Recap- italized
Recap Merged to Danamon and PermataBank
Almost half of private domestic banks were
either closed or taken over by the government
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Bank Restructuring Unit
Banks Indicators under IBRA
..in general, banks performance have been
improving, especially on CAR, NPL and LDR....
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
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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
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Core Asset by type of obligor
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Core Asset by Line of Business
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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
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Asset Management Investment
Equity Divestiture
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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
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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

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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)

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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) 2 19 Sept
• Investment Asset Sales Program (PPAI) 3 Batch
  1 24 Sept
• Treasury Asset (PPSBM) 3 17 Sept

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Timeline of Remaining Disposal Programs in 2003
2004
July
Aug
Sept
Oct
Nov
Jan
Feb
June
Dec
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
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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
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Banks 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)
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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 2003 -
January 2004
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Closure of IBRA
IBRA's Task Achievement and Future Plan
IBRA'S Task
Achievement
Near Future Plan

• No more Recapitalization Program
• Most of the Bank Divestment Programs are
  Completed.
• Minority Ownership at banks

Bank Restructuring
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
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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
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For further information please visit our website

http//www.bppn.go.id
I B R A
The Indonesian Bank Restructuring Agency