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The Ministry of State-Owned Enterprises on Friday re-affirmed its support for the rights issues planned by state-owned banks, PT Bank Mandiri and PT Bank Negara Indonesia.

“Neither Mandiri nor BNI’s rights issue plans were included in the previous 2010 privatization list,” said State-Owned Enterprises Minister Mustafa Abubakar.

“But the government has already put them in the revised list that will be sent to the Finance Ministry one to two month from now.” Every year, the SOE Ministry submits a privatization list to the Finance Ministry and the privatization committee headed by the Coordinating Minister for the Economy to seek approval for any plans to sell government shares in SOEs.

The Finance Ministry has previously indicated that it will not support the banks’ rights issues as it does not want the government’s stakes to be diluted and its dividend income reduced.

Pahala Mansury, chief financial officer of Bank Mandiri, welcomed the SOE Minister’s backing. “The company acknowledges the support of the SOE Ministry as it needs additional capital in order to decrease its capital adequacy ratio by 2 percent this year,” Pahala said.

Mustafa said in January that he would support any rights issues by state banks, including Bank Mandiri's plan to sell as much as 8 percent of additional equity in a rights issue this year.

However, a source at the SOE Ministry previously told the Jakarta Globe that the Finance Ministry will not approve the plan because it may reduce the government’s earnings from dividends and taxes.

Bank Mandiri, the country's largest lender, has already announced a plan to sell 7 percent to 8 percent of new shares this year. The government owns 66.76 percent of Mandiri.

Gatot Suwondo, BNI’s president director, has said that the bank will look to raise Rp 3 trillion ($327 million) through a rights issue to boost its tier-one capital-adequacy ratio to 12 percent.