BCA, Danamon may bid for Permata

BCA, Danamon may bid for Permata

Rendi A. Witular, Jakarta

Bank Central Asia (BCA) and Bank Danamon, the country's
largest and second largest privately owned banks said they are
still studying the possibility of entering the tender process for
a controlling stake in Bank Permata.

BCA president Johan Emir Setijoso said that they were still
doing a feasibility study to determine whether their investment
would be worthwhile.

"If we finally decide to bid for Permata, we may form a
financial consortium for it. But we are not going to be the lead
in the consortium," said Setijoso after a closed-door meeting
with the House of Representatives Commission IX for finance on
Tuesday.

Setijoso said that BCA could not lead the consortium because
banking regulations limit the size of a bank's investment in a
single entity to not more than 10 percent of its net equity.

As of the first quarter of this year, BCA has an equity of Rp
13.46 trillion (US$1.43 billion) and assets valued at Rp 136.2
trillion.

The government plans to sell 71 percent of its total 91.3
percent ownership in publicly listed Permata, which was
established two years ago by merging five ailing banks. The
proceeds from the sale would be used to help finance the state
budget deficit.

Permata is the country's seventh largest bank in terms of
assets worth about Rp 29.6 trillion as of the first quarter of
this year, and has an equity balance of Rp 1.58 trillion.

The government had previously obtained approval from
Commission IX to sell a 20 percent stake in Permata to public
investors via a secondary offering, but has not yet obtained
approval for the sale of the controlling 51 percent stake.

Several key legislators in the House have called on the
government to give local investors a better chance to buy Permata
in order to create healthier competition in the country's banking
sector.

Meanwhile, Danamon deputy president director Emirsyah Satar
said that the bank was also still studying whether it would bid
on Permata.

"We are still looking into whether we can work efficiently
with Permata," he said after the meeting with Commission IX.

Danamon, which is 62 percent controlled by the Singapore
government investment arm Temasek Holdings, has asset of Rp 54.8
trillion and an equity balance of Rp 6.95 trillion as of the
first quarter of this year.

Other local banks such as Bank Panin and Bank Artha Graha are
reportedly interested in bidding on Permata.