Panin moves ahead with Bumiputera acquisition plan<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Publicly listed Bank Panin said on Wednesday that upon completing
\nan assessment of Bank Bumiputera's financial performance, it had
\ndecided to go ahead with plans to purchase a 58.4 percent stake
\nin Bumiputera.<\/p>\n
As stated in a press statement, the medium-sized Panin would
\nnow seek official approval from the bank's shareholders at a
\nmeeting, scheduled for May 14.<\/p>\n
\"The bank will provide the funding for the acquisition of the
\n58.4 percent stake, accounting for 1.17 billion shares, from our
\nown internal cash,\" it said, without elaborating as to how much
\nit had set aside.<\/p>\n
Panin started the assessment of Bumiputera on April 1, it
\nadded.<\/p>\n
Aside from expanding its network and performance, Panin said
\nanother reason for the acquisition was that the two banks shared
\nalmost identical credit portfolios and client characteristics.<\/p>\n
Having survived the 1997-1998 banking crisis without the help
\nof the government's bail-out program, Panin has so far been
\nperforming fairly well. As of Dec. 31 last year for instance, it
\nposted a whopping 315 percent increase in after-tax profit from
\n2002.<\/p>\n
Panin also recorded a capital adequacy ratio (CAR) of 42.3
\npercent and loan to deposit ratio (LDR) of 71.2 percent in 2003,
\nwith assets valued at Rp 18.9 trillion.<\/p>\n
There are now three bidders competing for the controlling
\nstake in Bumiputera including Panin. The other two are the
\nZurich-based ICB Financial Group Holdings Ltd. and insurance
\ncompany AJB Bumiputera 1912.<\/p>\n
AJB already currently holds a 41.02 percent stake in
\nBumiputera.<\/p>\n
According to Dow Jones, the ICB Financial Group is an
\ninvestment vehicle of former Malaysian finance minister Daim
\nZainuddin.<\/p>\n
Bank Bumiputera has said that the winning bidder would be
\nannounced on May 17, although the closing of the transaction
\nwould only be completed on May 28 pending approval from Bank
\nIndonesia.<\/p>\n
The Banking Law stipulates that any party wishing to own a
\nmajority stake in a national bank must secure approval from the
\ncentral bank through a screening evaluation.<\/p>\n
A couple of medium-sized banks have previously sold shares to
\nstrategic investors.<\/p>\n
Only recently, Singapore-based Overseas-Chinese Banking Corp.
\n(OCBC) acquired a 22.5 percent stake in Bank NISP. These followed
\nthe purchase of smaller stakes in NISP and Bank Buana by the
\nWorld Bank's private investment arm -- the International
\nFinancial Corp. (IFC).<\/p>\n
NISP and Buana also survived the 1997-1998 crisis without the
\ngovernment's bail-out package under the recapitalization program.<\/p>",
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