IBRA : Bridging The Future
I B R A
The Indonesian Bank Restructuring Agency
3 rd Forum on Asian Insolvency Reform (FAIR)
Seoul, Korea, 10-11 November 2003
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)

IBRA : Bridging The Future
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
1

IBRA : Bridging The Future
Overview
Performance to Date
Plans for
Going
Forward
•
•
•
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
2

IBRA : Bridging The Future
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
3

IBRA : Bridging The Future
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
4

IBRA : Bridging The Future
BI Liquidity
Assistance
Rp. 144.5 T
Recap Bonds
Rp. 425.5 T
Shareholder Settlement
Program
Bank Shares
Guarantee
Rp. 73.8 T
FAILED BANK
MoF
Advancement
Rp. 4.9 T
"Non IBRA
Affairs"
Non Performing
Loan
I B R A
• Shareholder
Settlement
• Investment
AMI
Rp. 130.72 T
•Bank Shares
Divestment
•Interbank
BRU
Rp. 123.34 T
•NPL
•Non Core Asset
AMC
Rp. 361.19 T
Notes : as of August 2003 (Finance Accounting)
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
•NPL
Litigation
Rp. 65.81 T
"IBRA
Affairs"
Marketable
Securities
Treasury
Rp. 13.50 T
5

IBRA : Bridging The Future
Overview
Performance to Date
Plans for
Going
Forward
• 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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
6

IBRA : Bridging The Future
50
40
30
20
….inflation rate is decreasing significantly after 1997 economic crisis ...
50
40
30
20
10
0
90
80
70
60
Inflation Rate 12000
… while exchange rate is stabilizing continuously
Exchange Rate
10000
8000
6000
4000
97 98 99 00 01 02 Juli'03 Sept'03
… short term interest rate is steadily
70 declining ...
Short term interest rate (SBI)
60
10
0
1997 1998 1999 2000 2001 2002
2000
1997 1998 1999 2000 2001 2002
M ar
' 0
3
Ju l'
03
Se pt'
0
3
… interest rate spread is moving from negative during the crisis to positive spread ...
Jul' 03 Sept'03
50
Interest Rate
45
40
35
30
25
20
15
10
96 97 98
Source: Bank Indonesia
99 00 01 02
Loan
Deposit
Jul' 03 Sept' 03
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
7

IBRA : Bridging The Future
Massive bank runs and loan defaults forced closure of commercial banks
JV and foreign
Public domestic
Private domestic
The Commercial Banks in Indonesia
Number of banks
238
164
151
44
40 10
34
38
43
46
160
81*
57
Foreign
JV
72 banks failed, then administered by IBRA
Banks under IBRA
Number of banks
72 52
15
3
2
1997 1999 2000
*Almost half of private domestic banks were either closed or taken over by the government
Failed
Banks
Closed
Recap & Merged to
Danamon and
PermataBank
Recapitalized
•BCA
•Niaga
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
8

IBRA : Bridging The Future
Banks Indicators under IBRA
…..in general, banks performance have been improving, especially on CAR, NPL and LDR....
CAR (%) NPL (%)* LDR (%)
BANK
IBRA
OWNERSHIP
(%) June 2003
Niaga
Danamon
Lippo
BII
Permata
BCA
45.06
48.13
54.84
93.49
97.67
8.50
2002
June
'03
2002
June
'03
2002
June
'03
12.72
12.53
6.16
4.07
60.23
64.13
25.33
24.17
4.40
3.40
51.50
66.18
21.10
23.21
12.40
3.02
22.70
23.68
33.21
25.88
9.02
3.50
20.04
29.32
10.40
10.50
27.20
4.90
40.50
36.20
32.19
38.25
3.47
2.33
20.44
21.70
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
9

IBRA : Bridging The Future
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
BCA
- IPO 22%
Bank Date
May/00
- Secondary Offering 10%
- Strategic Sale 51%
July/01
April/02
- Market Placement 1,6% September/03
Sub Total
Bank Niaga
- Strategic Sale 51% November/02
- Market Placement 20% July - Sept 2003
Sub Total
Bank Danamon
- Strategic Sale 51% May/03
- Market Placement 20% May - July 2003
Sub Total
Proceed (Rp. Trillion)
0.93
0.50
6.90
0.28
8.61
1.06
0.44
1.50
3.02
1.20
4.22
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
10

IBRA : Bridging The Future
Corporate
Type of Obligor
Commercial
SME/Retail
Total
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
%
83.60%
7.80%
8.60%
100.00%
11

IBRA : Bridging The Future
Group Line of Business
Property / Infrastructure
Basic & Chemical Industry
Various Industry
Trading / Service
Agriculture
Holding Company
Financial Institutions
Consumer Industry
Mining
Other
TOTAL
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
%
25.4%
23.6%
11.6%
8.9%
6.3%
6.4%
4.7%
1.1%
0.3%
11.7%
100%
12

IBRA : Bridging The Future
Loan Disposal
Year Disposal Program
(IDR. Trillion)
Loan Principal Disposal Proceeds Recovery Rate
1999
2000
2001
2002
2003
Credit Card
CLS I, II & SME
CCAS III, IV-1,2, Direct
Selling
CCAS IV-3, CCAS
V,CULS, Direct Selling,
PPAK,PPAK-PPL,P3AK
PPAK3,PPAS2, PPAK IV-1
0.08
7.49
19.74
109.26
55.69
0.04
2.90
9.33
27.93
5.47
50.00%
38.72%
47.26%
25.56%
9.83%
Total 192.26
45.67
23.75%
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
13

IBRA : Bridging The Future
Equity Divestiture
Year
1999
2000
2001
2002
2003 *
TOTAL
* Until August 2003
Acquisition Value
(IDR Trillion)
0.419
6.259
24.740
4.247
6.786
42,451
Proceeds
(IDR Trillion)
0.538
5.715
10.383
2.335
0.739
19,710
Recovery
128%
91%
42%
55%
11%
46%
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
14

IBRA : Bridging The Future
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
Rp. Tn
160.0
State Budget Target for IBRA (Cash & Bond)
IBRA's Achievement (Cash & Bond)
140.0
120.0
100.0
80.0
60.0
40.0
20.0
17.00 17.15
18.90 20.71
27.00
41.91
-
1999/2000 2000 2001
Year
Note : IBRA’s achievement in 2003 is per Sept 2003
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
42.82
55.12
2002
26.00
15.29
2003
131.72
Total
150.18
15

IBRA : Bridging The Future
Overview
Performance to Date
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
16

IBRA : Bridging The Future
The Establishment of Deposit Insurance Agency (LPS)
•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)
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
17

IBRA : Bridging The Future
Recently Closed Transactions
• Loan Asset Disposal Program (PPAK 4)
• Block Sale 20% of Bank Niaga shares
• Strategic Asset Sale Program (PPAS) 2
• Investment Asset Sales Program (PPAI) 3 Batch 1
• Treasury Asset (PPSBM) 3
26 Sept
16 Sept
19 Sept
24 Sept
17 Sept
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
18

IBRA : Bridging The Future
Timeline of Remaining Disposal Programs in 2003
June July Aug Sept Oct Nov Dec
2004
Jan Feb
51% share divestment of Bank Lippo
51% share divestment of Bank BII
Investment Asset Sales Program 3
(Batch 2 : Share & Receivable)
Property Asset Sales Program 4
(Batch 1 - Batch 5)
Conclude all remaining transactions
& prepare for
IBRA closure
Ongoing JV Property
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
19

IBRA : Bridging The Future
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
No
Assets Offered on PPAI 3 Batch 2
Sectors
1 Property
2 Finance & Securities
3 Timber
4 Edible Oil
5 Ceramics
6 Distribution
7 Mining
8 Others
No. of
Companies
37
38
13
3
2
2
2
20
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
20

IBRA : Bridging The Future
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%)
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
Strong in trade financing and consumer banking (card business)
– BII is one of the leading credit card operator in Indonesia
(currently aggregates to over
450.000 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)
21

IBRA : Bridging The Future
IBRA plans to dispose its property assets in several main locations in Jakarta and Surabaya via Joint Venture program, during October 2003 - January 2004
Location
Central Jakarta
Central Jakarta
East Jakarta
Surabaya
Approximate Area (ha.)
3.7
0.8
39.5
3.7
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
22

IBRA : Bridging The Future
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
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
Establishment of Deposit Insurance
Agency
23

IBRA : Bridging The Future
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
Property Assets
Loan
Remaining Bank Share
Holdco
Property
Holdco-
Non Property-
Loan Assets
Holdco-Non
Propertyequity
BPPN Badan Penyehatan Perbankan Nasional
The Indonesian Bank Restructuring Agency (IBRA)
24

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