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Wednesday, January 27, 2010

Fitch raise ratings of 8 Indonesian banks

has been released by
Irvin Avriano A.
for Bisnis Indonesia

Fitch raise ratings of 8 Indonesian banks

JAKARTA ( Fitch Ratings raised the issuer default ratings (IDR) of long-term foreign denominated issued by PT Bank Mandiri Tbk and seven other national banks from the level of BB to BB+.

Based on Fitch's press release which published today, the banks who had its ratings improved are PT Bank Rakyat Indonesia Tbk (BRI), PT Bank Central Asia Tbk (BCA), and PT Bank CIMB Niaga Tbk. Next PT Bank Danamon Indonesia Tbk, PT Bank Internasional Indonesia Tbk (BII), PT Bank OCBC NISP Tbk, PT Bank UOB Buana Tbk, and PT Bank Negara Indonesia Tbk (BNI).

Ranking the following actions for increased long-term debt ratings Indonesian government from level to level of BB and BB+ with stable outlook earlier this week. Improvement ratings have also been made to the three telecommunication operator company yesterday.

"In addition to an increase in ratings of Indonesia, the increase in long-term rating IDR these banks reflect the resilience of financial performance in the difficult operating conditions, especially in the 1st half of 2009," said Tan Lai Peng, director at Fitch's financial institutions group in the press release.

He explained that this action also in line with Fitch's expectations that improvements will continue in those companies given the macro economic outlook which is much stronger in 2010.

According to him, even though the quality of loans has decreased in almost all banks in 2009 and probably will continue in early 2010, the overall implications of control and impact of rising credit costs can be remains absorbed well by the profitability of banks that have been strong enough.

"The expectation of operating conditions which have better condition this year will support the credit quality and future companies' profitability," he added.

Improvement ratings are also made to the foreign-denominated subordinated bonds which issued by three banks namely Bank Mandiri, BII, and Bank Niaga from the level of BB- to BB level.

At the same time, Fitch also raises the support floor of the four-from-the-eight-bank, namely Bank Mandiri, BRI, BCA, and BNI from BB- to BB. On the other hand, basic support ratings of CIMB Niaga and Bank Danamon has been eliminated.

Fitch also set back the debt ratings of foreign-denominated short-term and support ratings of the eight banks.



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