Bank Permata's sale

Bank Permata's sale

Investors have warmly welcomed the Indonesian government's plan to sell Bank Permata to private investors. As such, a number of banks and pension fund institutions have been scrambling to form consortia to buy 51 percent of Bank Permata's assets.

On the side of Indonesian banks, Bank Mandiri has been trying to forge a consortium with Bank Buana; Bank BRI is trying to partner with the worker's social insurance fund PT Jamsostek and the Pension Fund to buy Permata.

On the side of foreign banks, Barclays-Rabobank will team up with Bank Danamon; ANZ with Panin Bank; Standard Chartered with Astra International and Maybank will cooperate with PT Jamsostek to acquire the controlling stake.

Bank Permata is a merger of Bank Bali, Bank Universal, Bank Patriot, Bank Artha Media and Bank Prima Express. Bank BNI has tried to buy Permata's assets but failed.

The Indonesian government hopes that it will earn Rp 2.6 trillion from the divestment of Bank Permata. The figure is, however, far lower than the bank's recapitulation fund of Rp 11.3 trillion.

All of the previous sales of Indonesian banks in recent years shows that foreign groups have emerged as the winner. BCA was purchased by U.S. investment firm Farallon; Bank Danamon by Singapore's Temasek; Bank Niaga by Malaysia's Commerce Asset Berhad; BII by Singaporean and South Korean investors; and Bank Lippo by Swissglobal.

Many Indonesian companies' assets have been gradually purchased by foreign parties since the economic crisis began in 1998. The latest Indonesian company to be bought by a foreign company is the telecommunications operator, PT Indosat, which was purchased by Temasek.

This newspaper (Republika) hopes that Bank Permata, which has been recapitulated with trillions of rupiah, would eventually fall in the hands of an Indonesian consortium. -- Republika, Jakarta