ANZ to boost stake in Panin to over 24%

JAKARTA (JP): Australia and New Zealand Banking Group Limited (ANZ) plans to boost its stake in publicly listed Panin Bank to 24.4 percent, from 4.9 percent at present, in a bid to strengthen its presence in the Indonesia's banking sector, the bank's executive said here on Friday.

Ian Colley, one of ANZ's senior executives, said the bank would buy the additional stocks from institutional foreign investors.

He said the purchase of the additional stake would cost ANZ about US$20 million.

"ANZ is interested in increasing its presence in the Indonesian banking industry through greater ownership of Panin Bank, and by becoming a strategic partner who can provide technical assistance," Colley told reporters following the signing of a technical services agreement between ANZ and Panin Bank.

Colley, who is also the president of ANZ Panin Bank, an existing joint venture between the two banks, said he hoped the Indonesian government's current banking reform would provide brighter prospects for the surviving banks.

ANZ said earlier that the options to buy over 19.5 percent of Panin Bank were bought from investors outside of Indonesia, and expire in mid-December, although this date can be extended.

ANZ has had a relationship with Panin for five years, through the ANZ Panin joint venture bank, in which it owns 85 percent, with the other 15 percent belonging to Panin.

A technical services agreement between Panin and ANZ was signed on Friday and was also attended by ANZ chairman Charles Goode and Panin Bank vice president Roosniati Salihin.

Under the agreement, the two banks agreed to undertake a joint strategic review of Panin to prepare the bank's overall business strategy for the next century.

"The strategic review will on one hand highlight areas where ANZ's expertise can strengthen Panin, such as treasury and credit risk management techniques, whilst on the other will identify opportunities, such as cards or international trade finance, where ANZ's product knowledge can add value to the business," Colley explained.

In addition to talking about ANZ's strengths, the reasons for the investment decision and the Indonesia's banking prospects, the press conference also discussed the condition of Panin.

Roosniati admitted that Panin switched to investing in Bank Indonesia short-term certificates (SBI), to balance the risk of placing funds in the inter-bank money market.

"Panin invests as much as Rp 3 trillion of its funds in the SBI," Roosniati told reporters.

She also said that Panin was known as a conservative bank before the crisis, as it did not give credits as aggressively as other banks in the growing economy.

Panin's total assets stood at Rp 7.9 trillion as of Dec. 1997. (02)