BRI may also join bid for Permata

BRI may also join bid for Permata

Dadan Wijaksana, Jakarta

State-owned Bank Rakyat Indonesia (BRI) said on Tuesday it
planned to join the bid for a majority stake in Bank Permata,
adding to the already large number of banks expressing interest
in the nation's seventh largest bank.

BRI president Rudjito told reporters that the two banks would
form a sound synergy as they complemented each other.

While Permata is strong in small-to-medium financing with
consumer loans being the focus as well as concentrating on urban
consumers, BRI is quite the opposite.

"BRI is the leading player in micro-financing, it focuses more
on commercial loans with branches spread across rural areas all
over the country," Rudjito said.

The Asset Management Company (PPA), an entity under the
Ministry of Finance, is planning to sell a 71 percent stake in
Permata later this year. The proceeds will be used to help
finance the state budget deficit.

PPA, which owns a 97.17 percent stake in the publicly listed
Permata, was set up to handle the restructuring and divestment of
assets formerly controlled by the now-defunct Indonesian Bank
Restructuring Agency (IBRA).

At the current price of Rp 950 per share -- which analysts say
represents more than four times its book value -- a 71 percent
stake in Permata should be worth about Rp 5.7 trillion (US$640.45
million).

Permata has attracted attention from various local and
external investors. High profile names such as Bank Central Asia,
Bank Mandiri, Bank Danamon, Bank Panin, Bank Artha Graha, Bank
Negara Indonesia (BNI), Singapore-based Temasek and UK-based
Standard Chartered Bank have all reportedly shown interest in the
bank.

Bank Buana also said it might bid by forming a consortium,
which would include Singapore-based United Overseas Bank (UOB).
Buana, Indonesia's 11th largest bank in terms of assets, is 23
percent owned by UOB.

PPA, while welcoming local interest, has set a requirement
that would only allow local banks with a bigger equity than that
of Permata to join the bid.

At present, Rudjito said that the bank's equity stood at Rp 11
trillion. He went on to say that BRI was considering forming a
consortium if its capital was deemed insufficient to acquire
Permata.

"Forming a consortium is in our minds, but our study has not
come to that stage," he said.

BRI's profit is expected to exceed the target of Rp 1.3
trillion for the first half of the year, with new lending during
the period having reached Rp 6 trillion, Rudjito said.

The bank's CAR stands at 23 percent, far above the minimum
requirement of 8 percent as set by the central bank.

CAR measures a bank's capital compared with its risk-weighted
assets including loans.

PPA said on Monday it would meet investors next week to gauge
sentiment toward Bank Permata in major business cities including
Singapore, Hong Kong, Kuala Lumpur and London. PPA said it
expected to conclude the sale by the third week of December.