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February 1, 2008 |
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BANK PERMATA: Fitch Upgrades Individual Rating to 'C/D' Fitch Ratings has upgraded the Individual rating of PT Bank Permata Tbk to 'C/D' from 'D' and affirmed its Support rating at '4'. The upgrade in the Individual rating reflects the bank's improved profitability and asset quality, while the Support rating reflects expectations for limited support from Standard Chartered Bank (SCB, 'A+'/Stable), which together with Astra International, own an 89% stake in Permata through a 50:50 joint venture. Permata is tapping into the technical resources of SCB, combined with support from Astra to further expand its banking business. Permata focuses on consumer and SME loans, which accounted for a combined 87% of total loans. Pre-provision profit improved to 3.0% of average assets in 9M07 on higher net interest margin and trading income, which helped to offset the increase in operating expenses as the bank continues to expand its network and IT system. NPLs declined to 5.5% of gross loans at end-September 2007, from 6.4% at end-2006 and provision cover increased to 85.9%, bringing it closer to the peer average of 85% (based on end-2006 data). Following the IDR500 billion subordinated debt issue in November 2006 and higher profits, total CAR improved to 13.9% from 9.9% in end- 2005, which is still below the peer average of about 20%. Bank Permata is the ninth-largest bank in Indonesia by assets and was formed from the merger of four IBRA-owned banks into Bank Bali in September 2002. In November 2004, the Indonesian government sold a 51% stake in the bank to a 50:50 consortium comprising SCB and Astra International (which is part of the Jardine group of companies in Hong Kong). |
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