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.