Chinkara OKs bank merger plan

Chinkara OKs bank merger plan

Abdul Khalik, The Jakarta Post, Jakarta

Bank Pikko, Bank CIC, and Bank Danpac announced on Tuesday that
Chinkara Limited Capital, the majority shareholder of the three
banks, had agreed to a merger proposal to create a bigger and
stronger new bank.

Danpac president Hermanus Hasan Muslim said Chinkara had also
confirmed that it was committed to injecting additional funds
into the new bank.

"We will complete the merger process in four to five months.
We have met with the officials from Bank Indonesia (BI) to
discuss the merger and they have welcomed the plan," said
Hermanus in a joint press conference.

He added that the management of the three banks supported the
merger plan as it would create synergies based on the specific
strengths of each bank.

According to the managements of the three banks, Chinkara is a
Bahama-based investment company that is investing heavily in
South East Asia. It has invested in several companies in
Indonesia, including the three banks. It owns 85 percent of the
shares in Piko, 55 percent in Danpac and 16.2 percent in CIC.

The proposed new bank would have more than Rp 10 trillion in
assets and 65 branches nationwide. It would offer various
services ranging from retail to corporate banking.

Hamidy, a director of CIC, said that each of the banks were
healthy as each had capital adequacy ratios (CAR) of over the 8
percent minimum requirement set by BI.

CIC has Rp 6.5 trillion in assets as of December 31, 2003, and
has branches in 15 cities nationwide. It concentrates on export
financing and currency trading.

Danpac has Rp 1.15 trillion in assets according to last year's
financial report and has 11 branches while Pikko has Rp 1.4
trillion in assets and 15 branches.