Five private banks to merge

JAKARTA (JP): Five private banks are to be merged as soon as government and shareholder permission has been obtained, the president director of PT Bank Internasional Indonesia (BII) announced last night.

In a press release sent to The Jakarta Post, Indra Widjaja said BII and PT Bank Dagang Nasional Indonesia signed a memorandum of understanding Saturday to combine their operations into one entity. The release was signed by Indra Widjaja.

They will be joined by PT Bank Tiara Asia, PT Bank Sahid Gajah Perkasa and PT Bank Dewa Rutji. The new bank, which will retain the name Bank Internasional Indonesia will have total assets of Rp 50 trillion (US$5.8 billion) and total equity of Rp 5 trillion.

Indra said: "The merger was undertaken in compliance with the government's guidelines to accelerate reforms in the banking sector in order to cope with the increasing globalization of financial services."

His statement added the merger would establish a more competitive bank with larger assets, a stronger capital base and improved liquidity. The new bank would also achieve higher income growth through synergy and improved cost efficiency.

BII officials could not be reached last night for further details.