BNI, Permata should learn from past merger mistakes
BNI, Permata should learn from past merger mistakes
Rendi A. Witular and Dadan Wijaksana, Jakarta
Bank Indonesia (BI) is urging state-owned Bank Negara
Indonesia (BNI) to set up a comprehensive feasibility study for
its plan to merge with Bank Permata to avoid similar "mistakes"
in the merger made by Bank Mandiri and Bank Danamon.
"The central bank supports the merger plan, but the process
should be clear. The banks must ensure that the merger will
result in a healthier bank in terms of financial ability,
performance, human resources and service," BI's Senior Deputy
Governor Anwar Nasution said on Tuesday after attending a meeting
with the House of Representatives's budget committee.
"The merger is not about moving someone's money from the right
pocket to the left. If that's the case it will be useless," he
said.
Anwar explained that BNI and Permata should learn from the
mistakes made during the merger of Bank Mandiri and Bank Danamon,
which, he said, are still undergoing a long consolidation process
despite the fact that they had spent a lot of money and laid off
hundreds of employees for the mergers.
Bank Mandiri was formed in late 1998 out of the merger of four
state banks: Bank Export Import Indonesia, Bank Pembangunan
Indonesia, Bank Bumi Daya and Bank Dagang Negara. Bank Danamon
was enlarged in 2000 when it was merged with Bank Jaya, Bank
Tiara, Bank Pos, Bank Rama, Bank Nusa Nasional and Bank Duta, and
Bank Risjad Salim Internasional.
BNI, which focuses on the corporate sector, proposed the
merger to the government a month ago in order to strengthen its
financial ability and to expand its business to the retail and
consumer sector, the main businesses of Permata.
Separately, Deputy State Minister of State Enterprises for
banking and finance Suad Husnan said that his office was still
evaluating the proposal and expected to come up with a result in
the second semester.
BNI and Permata are the country's second and seventh largest
banks respectively in terms of assets. BNI has assets worth Rp
131 trillion (US$19 billion) and Permata about Rp 30 trillion.