Danamon sells 14% shares in Chinatrust

Danamon sells 14% shares in Chinatrust

JAKARTA (JP): Publicly listed Bank Danamon agreed on Wednesday
to sell 14 percent of its shares in Bank Chinatrust Indonesia, a
joint-venture bank, to Taiwan's Chinatrust Commercial Bank.

Danamon said in a media statement that the transaction would
allow Chinatrust Commercial Bank to control a 99 percent stake in
the joint-venture bank.

"This does not go against the Bank Indonesia ruling that
allows a foreign bank to own up to 99 percent shares in a joint-
venture bank," it said.

The statement did not reveal the price of the transaction.

Bank Chinatrust Indonesia was formed in 1996 with the
Taiwanese bank owning 85 percent shares and its local partner
Bank Tamara the other 15 percent. But the latter was acquired by
Bank Danamon in 1999.

At the end of 2000, Bank Chinatrust Indonesia had total assets
of around Rp 1.43 trillion, and profits totaling Rp 49.3 billion.
The Jakarta-based joint-venture bank has branches in Bandung and
Surabaya.

Chinatrust Commercial Bank is a publicly listed bank with
total assets of around US$23 billion. The bank is one of the top
banks in Taiwan focussing on retail, corporate and investment
banking.

There have been rumors that Chinatrust Commercial Bank is also
interested in purchasing government shares in publicly listed
Bank Central Asia (BCA).

The Indonesian Bank Restructuring Agency (IBRA) is planning to
sell around 40 percent of government shares in BCA through the
stock market or as direct placement to institutional investors.
The divestment program is expected to be completed in July or
August.

But rumors suggested that Chinatrust wanted to purchase the
BCA shares via direct placement in a bid to obtain majority
shareholder status.

However, legislators have insisted that the sale must be
conducted by a double-track mechanism and that any strategic
partner willing to purchase government shares in BCA must be
classified as a major international bank. BCA is the country's
largest private bank.

The last requirement had been stipulated to avoid BCA's former
owner, the Salim Group, from owning shares in the bank. The Salim
Group had been lambasted for its role in abusing BCA, which
caused the government to spend a lot of taxpayers money in 1999
to bailout the bank.

Elsewhere, Danamon said that it had also signed a cooperation
agreement with Chinatrust Commercial Bank, under which Indonesian
workers in Taiwan can send money back home via the network
provided by the two banks.

Danamon said that the remittance service provided by
Chinatrust was popular among Indonesian workers in Taiwan,
currently around 70,000 workers.

Danamon said that in the future, the cooperation could be
expanded to other services including business finance, and
correspondent banking.(rei)