Profits attract foreign banks to Permata<\/p>\n
Dadan Wijaksana, The Jakarta Post\/Jakarta<\/p>\n
A combination of the banking sector's great potential for growth
\nand hefty earnings obtained from government bonds held by
\nrecapitalized banks are seen as the main factors behind the huge
\ninterest shown by investors competing for a majority stake in
\nBank Permata.<\/p>\n
At least eight consortia, dominated mostly by top foreign
\nbanks, reportedly submitted bids to acquire the country's seventh
\nlargest bank in terms of assets.<\/p>\n
British banks Barclays Bank Plc., Standard Chartered Plc.,
\nSingapore's United Overseas Bank (UOB), Australia and New
\nZealand-based ANZ Ltd., two Malaysian-based banks; Commerce
\nAsset-Holding Bhd and Malayan Banking Bhd (Maybank), are all
\nincluded on the list of contenders.<\/p>\n
Barclays Bank is teaming up with Holland-based Rabobank and
\nBank Danamon, while ANZ is in partnership with Bank Panin.<\/p>\n
On the domestic side, banking giants Bank Mandiri (teaming up
\nwith Bank Buana) and Bank Rakyat Indonesia (BRI) are leading the
\nlocal consortia.<\/p>\n
The government, which has a 97.17 percent stake in Permata, is
\ntrying to sell a 51 percent stake in the bank to raise cash to
\nhelp finance the state budget deficit. Friday afternoon was the
\ndeadline for bidders to submit preliminary bids. The winner is
\nexpected to be announced in October or November.<\/p>\n
\"Aside from Permata's good showing so far, it (investors'
\ninterest) shows also that our banking industry has a lot to
\noffer, as the loan growth is currently yet to pick up and it full
\nstride,\" banking observer Ryan Kiryanto said.<\/p>\n
Banking loans, albeit on the rise lately, have not yet reached
\ntheir potential due to the slow debt restructuring progress in
\nthe corporate sector.<\/p>\n
The suggestion was confirmed by Standard Chartered, which is
\nmaking its third attempt to acquire a local bank here in as many
\nyears. With huge profits from its Asia operation, Stanchart has
\npicked the nation's largest car maker PT Astra International as
\nits local partner in acquiring Permata.<\/p>\n
\"We see Indonesia as a very high growth market and are looking
\nto grow there,\" the bank spokesman Paul Marriage has been quoted
\nby Bloomberg as saying recently.<\/p>\n
As of the second quarter of the year, the central bank data
\nshowed that loan-to-deposit ratio stood at 45.6 percent, up from
\n43.2 percent in the previous quarter. Still, the ratio remains
\nfar below 70 percent to 80 percent recorded in the pre-crisis
\nperiod.<\/p>\n
The government injected massive amounts of bonds into the
\nbanking sector in the wake of the late 1990s financial crisis to
\nhelp them stay afloat. The banks receive interest from the
\nbonds.<\/p>\n
Analysts said with around Rp 11 trillion worth of
\nrecapitalization bonds it holds, the temptation to acquire
\nPermata, with its hefty annual earnings from the bonds, would be
\ntoo hard to resist.<\/p>\n
Iman Sugema of the Institute for Development of Economics and
\nFinance (Indef) was of that opinion as well.<\/p>\n
\"While hopes are high that foreign ownerships could accelerate
\nthe implementation of best practices in the banking sector, we
\ncannot rule out the possibility that they are coming here simply
\nto enjoy the profit reaped from interest in the recap bonds in
\nour banks,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/profits-attract-foreign-banks-to-permata-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}