UOB to buy Bank Buana shares<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
United Overseas Bank Ltd. (UOB), Singapore's second largest
\nbank, announced on Tuesday it was seeking to acquire a 23 percent
\nstake in Indonesia's mid-sized Bank Buana in a bid to gain access
\nto the country's market of 210 million people.<\/p>\n
The planned acquisition is part of a rising number of foreign
\ntakeovers in the country's medium-sized banking sector.<\/p>\n
In a statement to the Singapore Exchange (SGX), UOB said it
\nhad entered into an exclusive arrangement with PT Sari Dasa Karsa
\nof Indonesia to conduct a due diligence with a view to buying a
\n23 percent stake in Bank Buana.<\/p>\n
Sari Dasa currently holds a 54.93 percent stake in Bank Buana.<\/p>\n
UOB said the proposed acquisition was subject to all relevant
\napprovals in Singapore and Indonesia being obtained and to
\ndefinitive agreements being signed.<\/p>\n
The 23 percent acquisition would be worth about Rp 800 billion
\n(US$93 million), based on the current share price of Bank Buana.
\nThe bank's shares on the Jakarta Stock Exchange ended higher by
\nRp 100 at Rp 700 on Tuesday.<\/p>\n
Bank Buana director Pardi Kendy told The Jakarta Post the bank
\nhad decided to enter a partnership with UOB in order to expand
\nits network in the regional and domestic markets and to
\nstrengthen its financial ability.<\/p>\n
"UOB has a broad knowledge of international banking
\nactivities, which can be a particular advantage for Bank Buana in
\nits attempt to expand its business regionally," said Pardi.<\/p>\n
He expected the partnership would transform Bank Buana into
\none of the 10 largest banks in the country in terms of assets in
\na year or two.<\/p>\n
Pardi also hinted that there was a possibility that UOB might
\nacquire a majority stake in Bank Buana over time.<\/p>\n
Bank Buana, Indonesia's 11th largest lender, was established
\nin 1956 as a privately owned national bank. Since July 2000, Bank
\nBuana, which has a network of 171 offices and 92 automatic teller
\nmachines, has been listed on the Jakarta and Surabaya stock
\nexchanges.<\/p>\n
As of December 2003, the bank's total assets reached Rp 14.3
\ntrillion with a net income of Rp 221 billion. The return on
\nequity and on assets stood at 17.0 percent and 2.3 percent,
\nrespectively.<\/p>\n
Bank Buana was one of the few banks in Indonesia that was able
\nto survive without a government bailout in the aftermath of the
\nfinancial crisis of 1997.<\/p>\n
According to Pardi, this year the bank expects to boost its
\nlending by Rp 1.8 trillion to Rp 7 trillion, mostly to small and
\nmedium enterprises.<\/p>\n
The bank has also projected Rp 250 billion in net profit this
\nyear, up from Rp 221 billion last year.<\/p>\n
Analysts have noted that foreign banks are aggressively trying
\nto tap the Indonesian banking sector, which still has plenty of
\nroom for improvement in lending activities with various economic
\nsectors still untapped.<\/p>\n
With a market of 210 million people, 10 times neighboring
\nSingapore and Malaysia combined, the country's banking sector
\npromises a lucrative return for foreign investors.<\/p>\n
Several weeks ago, UOB rival Overseas-Chinese Banking Corp.
\nacquired a 22.5 percent stake in Bank NISP, Indonesia's 12th
\nlargest bank and also a competitor of Bank Buana.<\/p>\n
Zurich-based ICB Financial Group has plans to buy a
\ncontrolling stake in Bank Bumiputera. Another medium-sized
\nlender, Panin Bank, has completed moves to allow its foreign
\npartner, Australia and New Zealand Banking Group Ltd., to
\nincrease its ownership from 11 percent to 29 percent.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/uob-to-buy-bank-buana-shares-1447893297",
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