RPT-Fitch affirms the rating 4 Bank Indonesia Regional Development

Wed Mar 26, 2014 6:17am EDT

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March 26 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has affirmed the National Long-Term rating at 'A (idn)' to four development banks Indonesia-PT region Regional Development Bank Riau and Riau Islands (Riau Riau Bank), PT Lampung Regional Development Bank (Bank Lampung), PT Bank Regional Development Maluku (Moluccas Bank) and Bank of North Sulawesi (Bank of North Sulawesi). Outlook is stable. on the same time, Fitch has set a national ranking in the Short Term 'F1 (idn) for Bank Riau Riau, Lampung Bank and the Bank of North Sulawesi. Complete List ranking results available at the end of this report. A (idn)

National ranking in the category 'A' indicates the expectation would risk failure low pay relative to other issuers or securities in Indonesia. However, a change in circumstances or economic conditions may be affect the capacity to pay in a timely manner than commitment Financial shown by the higher rating categories. F1 (idn)

National Rating 'F1' indicates the capacity to pay financial commitments The most powerful in a timely manner relative to other issuers or debt securities in Indonesia. National rating scale of Fitch, the ratings given the lowest default risk relative to the rest of Indonesia. If specific liquidity profile is strong, a "+" is added to the ratings given.

Bank Riau Riau, Lampung Bank, Bank of Maluku and North Sulawesi Bank is majority owned by the provincial government, district and municipality in the province each. Affirmation of the National Long-Term rating reflecting support is unchanged from the provincial government and the central government. The central government can provide limited support to the four banks development of the area, if necessary, given the important role these banks in support of regional economic development, although the risk owned by systemic lower than other big banks.

Factors Stage Actuator

National rankings Bank Lampung, Maluku and North Sulawesi Bank Bank reflects Fitch's view of the possibility of support provided by each provincial government, if necessary, given the majority shareholding in these banks. This is in addition to the potential, albeit limited, support from the central government based on the essential role of banks is in support of regional development. Although the Bank Riau Riau accounted as small banks (0.5% of total banking assets), a national ranking of Bank Riau reflects the low-cost funds, capital position strong asset quality and profitability, and adequate.

Regional development banks were acting as treasurer government province and a major conduit loans to local government officials. The central government has shown its support evidenced by a capital injection to 12 banks, including the fourth bank, at the time of the financial crisis in Asia in From 1997 to 1998.

sensitivity rating

Pressure drop in rankings can occur when the ability of governments and / or tendency to provide financial support to the ekstraordinari dareah development banks weakened. However, Fitch believes this less likely to occur in the near and medium term. reduction standalone financial profile of the four banks is not likely to affect the national rankings, considering the majority ownership by provincial governments and potential support to the four banks.

The potential rise in the national rankings of these banks can occur when The banks may approach the banks greater in Indonesia than In terms of the magnitude of surgery and assets while maintaining asset quality Strong, high core capital and profitability are healthy with composition strong low-cost funds. The upgrade of Indonesia also be affect the rankings of the four banks.

Sensitivity Ranking - Rating Debt

Ranks of senior bonds and medium-term notes denominated in Rupiah from banks together with national rankings Term Their length. This reflects Fitch's view of an obligation bonds each company that is direct, senior unsecured and not a subordinated debt and rated the same as other debts not guaranteed and not a subordinated debt. Changes to National Long-term ratings will affect the ratings of bonds

Details of the rating action is as follows:

Bank Riau Riau Islands:

Long-Term National Rating affirmed at 'A (idn)'; Outlook Stable

Short-Term National Rating assigned at 'F1 (idn)'

Senior Bond Euro Bond 2011 affirmed at 'A (idn)'

Bank Others

Long-Term National Rating affirmed at 'A (idn)'; Outlook Stable

Short-Term National Rating assigned at 'F1 (idn)'

Senior Bonds Euro 2012 affirmed at 'A (idn)'

Bank Maluku

Long-Term National Rating affirmed at 'A (idn)'; Outlook Stable

Short-Term National Rating affirmed at 'F1 (idn)'

Senior Bon Euro 2011 affirmed at 'A (idn)'

Bank Sulut

Long-Term National Rating affirmed at 'A (idn)'; Outlook Stable

Short-Term National Rating assigned at 'F1 (idn)'

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