Commerce raises Niaga stake to 61.1%

Commerce raises Niaga stake to 61.1%

KUALA LUMPUR: Commerce Asset-Holding Bhd., Malaysia's No. 2 lender by assets, bought 6.53 percent of PT Bank Niaga, raising its stake in the Indonesian lender for a second time in two weeks to tap demand for loans in Southeast Asia's biggest economy.

Commerce bought 514 million Niaga shares for 109.2 million ringgit (US$29 million), boosting its stake to 61.1 percent, it said in a statement on Tuesday.

Commerce's purchase will "further strengthen its foothold in the Indonesian financial services market", the Malaysian lender said. It did not disclose who sold the shares.

Low interest rates and faster economic growth are boosting demand for credit in Indonesia. The economy is forecast by the government to expand 5.5 percent this year, the fastest since 1996, up from 5.1 percent growth last year.

Niaga surpassed profit targets in 2004, with net income rising 41 percent to Rp 660 billion ($69.6 million), it said in February.

Commerce gained management control of Bank Niaga in 2002, after it bought 51 percent of the lender from the Indonesian government for Rp 1.057 trillion. It announced the purchase of an additional 2.09 percent stake on April 13.

The announcement came after the 5 p.m. close of trading in Kuala Lumpur. Commerce was unchanged at 4.50 ringgit. Niaga fell 1 percent to Rp 475.-- AP