Aussie bank to form local venture

Aussie bank to form local venture

SYDNEY (AFP): Commonwealth Bank of Australia Ltd. (CBA) said yesterday it had received approval in principle from Indonesia's Ministry of Finance to establish a joint-venture bank in Indonesia.

Managing director David Murray said the CBA would join forces in an equal partnership with BII, Indonesia's third largest private bank.

The joint venture, PT Bank BII Commonwealth, is capitalized at Rp 150 billion (US$68 million) and will be based in Jakarta.

It will initially target Indonesian, multinational corporate and commercial clients but Murray said the consumer market offered significant opportunities over the longer term.

He said the development was part of the Commonwealth Bank's strategy of expansion in the Asian region. It already has offices in Beijing, Shanghai and Hanoi.

The 50-50 ownership of the new bank will be a first for Indonesia. Other joint venture banks are controlled by the foreign partner, usually through an 85 percent equity stake.

The Commonwealth Bank said the equal shareholder commitment in Bank BII Commonwealth emphasizes the separate capabilities of each partner.

Murray said the partners will share client access, products, technology and distribution capabilities.

"Asian-related assets, transactions and income are increasingly important for the bank," Murray said.

"This joint venture gives the bank access to the dynamic Indonesian banking market with a partner of recognized quality and strength."

Commonwealth Bank will retain its autonomous representative office in Jakarta.