Shawn Donnan, Jakarta – Investors handed a vote of confidence to Indonesia's banking sector on Friday, taking minority stakes in four leading banks off the government's hands for $184 million.

Indonesia was the economy hit hardest by the Asian financial crisis and analysts say the banking sector, recapitalised to the tune of 400,000 billion rupiah ($47.6 billion), has yet to begin the kind of lending to local corporations needed to spur on growth.

However, Jakarta has been successful in unloading the banks that ended up in its hands as a result of the crisis, often to foreign investors.

The Indonesian Bank Restructuring Agency, which is due to close its doors on February 27, said on Friday it had sold stakes in Bank Danamon, Bank Niaga, Bank Internasional Indonesia and Bank Central Asia. About 60 per cent of the buyers were domestic investors, with the remainder from offshore.

Most popular, Ibra officials said, was 7.85 per cent in Bank Danamon, the private placement of which was eight times subscribed. Shares in Danamon, Indonesia's fifth-largest bank by assets, closed up almost 10 per cent. A consortium led by the Singapore government's investment vehicle, Temasek Holdings, last June bought a 51 per cent stake in Danamon for $350 million, paying 1,202 a share.

Danamon this week reported a 61 per cent surge in its 2003 net profit to 1,529 billon rupiah and has drawn added interest from investors as a result of its deal to buy 75 per cent of one of Indonesia's biggest motorcycle finance companies, Adira Finance.

Danamon's shares on Friday closed at 2,825 rupiah a share with the 7.85 per cent sold by the government sold for 2,600 rupiah a share, Ibra officials said.

Also placed on Friday were: 1.99 per cent of Bank Internasional Indonesia at 105 rupiah a share; 1.48 per cent of Bank Central Asia at 3,800 rupiah a share, and 5.65 per cent of Bank Niaga at 35 rupiah a share.