BEI OFFER BANKING CAPITAL THROUGH CAPITAL MARKET

In the effort to minimize risk in the banking industry as competition heightened, I was felt necessary to inject capital amounting to USD 113 trillion in 2015. Re grouping of bank’s capital by BI made most medium asset banks to increase capital.

The option to obtain additional fund at the stockmarket through IPO was taken by some banks to meet the requirement by 2016 next. However there was an alternative option in 2016 next, i.e. by rights issue and release of bonds; hence the need of around Rp.100 trillion from the stockmarket could be fulfilled.

This was disclosed by President of BEI Ito Warsito in Jakarta on Thursday [174]. He said that in terms of trade liquidity, the Indonesian stockmarket was believed to be able to fulfill the need of financial industry. In 2013 alone Trade liquidity per day came to Rp.6.5 trillion. “To calculate on the basis of 264 days a year, already Rp.1.200 trillion could be reached,” Ito said.

Hence the capacity of trading liquidity reflected the great potential fund to be obtained from the stockmarket. On the average, the fund that could be taken from the capital market came to Rp.300 trillion and that was inclusive of fund for financing APBN through state promissory notes.

However, Ito said, so far there had been limitations of instrument offer like the SUN promissory notes whose tenure was short. He expected that the need to increase capital for 2015 could rely on instrument at the stockamarket instead of overseas credit.

Bank Indonesia made it mandatory for bank’s LDR to be around 78% to 92%. Banks whose LDR were beyond that corridor would be given penalty of additional Minimum Mandatory Giro [GWM]. At the moment OJK was scheming up regulations on Minimum CAR from 8% to 12%.

As per February 2014, the average CAR for national banking industry was 19.91%. The need for capital through 2015 was extremely high and hard to attain. The point was that today Indonesia’s capital market industry only had the capacity to procure additional capital of Rp.30 trillion.

Head of the R&D Division of Perbanas Alviani disclosed that based on simulation run by Perbanas, total accumulated need for extra capital by banks last year till 2015 was above Rp.100 trillion. In 2015 extra capital was mostly needed by BUMN banks.

The 2015 – 2017 period was peak time for banks in seeking for capital need, assuming that growth of find was around 12% - 15%. Meaning as from now banks must see when capital would be needed and be prepared because the tendency to for bond obligation was not easy.

“Moreover, next year there would be liquidity crisis all over the world as the USA is planning to do Tapering Off” Aviliani remarked. In the next few years the banking sector would contract but this was in reverse to non-bank institutions which would increase in number. From 2012 - 2030 banks would diminish in number but non-bank bodies would be necessary to anticipate the growing need for education for the public about non bank financial services. Banks would tend to from conglomerations which was a way to raise capital. (SS)

Business New - April 23, 2014