BNI cancel plans bonds issuances

PT Bank Negara Indonesia Tbk (BNI) cancels its plan to issue US$300 million in sub-debt due to unfavorable macro-economic conditions.

The European financial crisis had made bond yields expensive, making it unfeasible for BNI to issue bonds. BNI previously had actually named Barclays and JP Morgan the underwriters.
He explained the company was preparing rights issue to substitute for the bond issuance plan.

BNI targets to raise IDR4 trillion-IDR7 trillion fund from the rights issue, which will be realized in the fourth quarter this year.
The measure simultaneously bolsters the percentage of public shares from around 26% to more than 40%, leading BNI to be able to enjoy a 5% tax cut."

The company planned to exercise rights issue to support business expansion. BNI had a capital adequacy ratio (CAR) of 10.5% if first-tier capital was put into account and 13.1% if second-tier capital was put into consideration.

The state lender, which has 1,100 branch officers nationwide and in several big cities in the world, recorded IDR1 trillion in earning in the first quarter of 2010, rising from IDR635 billion in the first quarter of 2009.
BNI's NPL ratio reached 4.6%, with the net interest margin (NIM) of 5.8%, the return on assets (RoA) of 2.5%, and the return on equity (RoE) of 25.4%.
BNI, which per March 2010 had a total asset of IDR218.27 trillion, plans to spin-off its Islamic business unit into an Islamic commercial bank on June 18.
BNI will join hands with a strategic partner from the Middle East to explore the Islamic banking business in Indonesia.