Bank Tiara: Success in being different

Bank Tiara: Success in being different

As the first bank to set up after the landmark "Pakto" banking
deregulation package of October 1988, Bank Tiara is quite a young
establishment. Nonetheless it has already demonstrated its astute
entrepreneurship and has earned itself a recognized place in a
banking sector dominated by bigger and more established financial
institutions in Indonesia.

Since its inception in January 1989, the bank has recorded
several outstanding achievements. It rapidly climbed to foreign
exchange bank status, receiving its foreign exchange license in
March 1992 -- the first post-Pakto bank to be given this status.
It also became the fist post-Pakto bank to be publicly listed,
placing 25 million shares on the Jakarta Stock Exchange in
November 1993.

Bank Tiara's impressive performance is due largely to its
business strategy. The bank's focus from the very beginning was
to concentrate on small and medium-sized enterprises -- a move
that ran against the banking trends of the late 1980s.

"Pakto" eased the regulations for the establishment of new
banks and opening of new branches. The trend for banks then was
aggressive expansion and lending. Consumer and retail banking
were the norm, with branches mushrooming everywhere.

Except for one. "We were observing the market carefully then.
Traditionally, private banks start by serving the middle market.
But after Pakto, we noticed that most banks were moving away from
it and towards the consumer and upper-tier corporate markets. The
small and medium-sized businesses were left ignored," said
Hendrick Kolonas, president director of Bank Tiara.

"After a careful market study, we decided to target where
others did not tread. Since then, the middle market has been a
proven strategy," he added.

Thus from the very start, Bank Tiara has charted an extremely
clear strategy. Kolonas believed in the lucrative middle market
businesses, many of which are run by family entrepreneurs.
The first branch opened in Jalan Batu Ceper, Central Jakarta,
where many wholesale, textile, export and import businesses were
located.

With only one branch, 40 people and a capital base of Rp10
billion when operations started in July 1989, Bank Tiara grew by
leaps and bounds to become one of Indonesia's top 30 private
banks in 1993.

Ometraco group

Bank Tiara is part of the Ometraco group. It is 66.2 percent
owned by Ometraco, an industrially-powerful group founded in 1960
by Ferry Teguh Santosa in Surabaya, East Java.

In the early days of the 1970s, Ometraco entered into
agriculture and commodity trading. By the end of the decade, the
group had expanded into farming and property. Later in the 1980s,
it entered into animal feeding, banking, finance, stockbroking,
hotel and technical businesses.

In 1993, Ometraco's consolidated turnover was in excess of Rp
1 trillion. Bank Tiara is the fifth Ometraco group company to be
listed on the Jakarta Stock Exchange.