Wednesday, January 14, 2015

IDR 9 trillion Rights Issue, Mandiri Bank Ready to Compete in ASEAN

The additional capital for Bank Mandiri's rights issue will be used to strengthen limit Lending Limit (LLL). Strong capital becomes important for national banks to be able to compete with other Asean countries. The existence of these conditions, the government through the Ministry of State-Owned Enterprises (SOEs) will provide additional capital in one state bank PT Bank Mandiri Tbk. According to Director of Bank Mandiri, Budi Gunadi Sadikin, the capital increase will be carried out through the issuance of new shares scheme alias rights issue in 2015. He claimed, of the rights issue the company will obtain fresh funding which is expected to IDR 9 trillion.

Of this amount the government as the majority shareholder who owns 60% of the Bank will include around IDR 5.6 trillion in additional capital. Budi asserted, the current proposed capital increase has been entered into the House of Representatives (DPR) and wait for approval. So when the rights issue will await the approval of Parliament.

"It is the purpose of this provision is to strengthen the capital of banks' capital so that the future can be more competitive arena of Asean," Budi said in Jakarta on Tuesday, January 13th, 2015.

Furthermore Budi added, that this fresh capital injection of which will be used to strengthen limit Lending Limit (LLL). That is because the bank has a lot of large corporate customers as one of them is PT Pertamina.

"I give an example, for example Pertamina had a credit line of $ 5 billion. Pertamina in Singapore by Petral also have a line of credit for it. So if if the credit line was being moved, then the need for financing national banks and local banks will not be strong because of the small capital, "he said.

According to him, my wish to the government to strengthen the capital of the state-owned banks to ensure that national banks can sustain economic growth in Indonesia. So, not overly dependent on foreign financing in line with the potential for exchange rate fluctuations and exchange rate mismatch.

"Bank's core business requires huge capital. Then the banking capital should really cepet strengthened, so that banks in Indonesia that could be ready to face the competition with banks in ASEAN countries, "said Budi.

Previous Minister of State, Rini Soemarno said, that the rights issue amounting to 9 trillion just to Bank Mandiri, this is because the other state-owned banks still good capital. Because he chose Bank Mandiri Bank Mandiri spending quite large dividends. The government felt the need to improve the ability of the Bank to further expand its financing.

"I'll turn his plans with other state-owned banks. Because if you go to the capital markets, banking third SOE everything difficult. So this year the Bank, next year is different. This was done so that the market is not saturated. If all incoming SOE banks to enter the market, it is difficult, "Rini lid.

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