ABN AMRO opens two new branches

JAKARTA (JP): The Netherlands-based ABN AMRO Bank will open two new branches at the end of this month in the South Sulawesi provincial capital of Makassar and in the East Kalimantan town of Balikpapan, according to its Indonesia country manager Pieter van den Akker.

"We'll keep expanding. We have a long-term strategy here," he told a small media gathering on Thursday.

With the opening of the new offices, ABN AMRO will have 15 branches throughout the country, making it the largest operation among foreign banks in Indonesia.

Van den Akker said Balikpapan was an attractive market for its corporate and customer banking services, particularly with the strong oil and gas industry in the town.

He said Makassar (previously Ujungpandang) was also an attractive market because many consumer goods companies had started to expand their operations into the city to cater for the South Sulawesi market.

ABN AMRO has been in Indonesia for more than 170 years. Last year it opened four branches at a time when other foreign banks got cold feet as the country tumbled into its worst economic and political crisis in three decades.

The bank traditionally provides corporate banking services, but in the past four years it has entered the customer banking business for upper end customers.

Van den Akker said his bank's lending strategy over the next six to 12 months would largely focus on existing clients, both multinationals and local exporting businesses with good track records.

"It's difficult to approve new projects right now," he said.

He said the peaceful democratic presidential election last month and improving relations with the International Monetary Fund augured well for the country's economic recovery as it had restored investor confidence.

But many foreign investors would still be watching for further (political and economic) developments he said, pointing to developments in the restive province of Aceh and in the country's bank restructuring program.

The Acehnese people, long suppressed during the 32-year regime of former president Soeharto, have stepped up pressure to demand a separation of the resource-rich province from Indonesia, which, if realized, some fear may lead to the disintegration of the state.

Van den Akker added the fear of the so-called Y2K computer disaster, which might occur at the turn of the century, has kept foreign investors from entering Indonesia.

"Foreign investors may start coming in next year," he said. (rei)