GE Capital buys 7% stake in Bank Bira from the public

GE Capital buys 7% stake in Bank Bira from the public

JAKARTA (JP): General Electric Capital Services of the United
States has bought a 7 percent stake in publicly listed Bank Bira
for Rp 48 billion (US$20.4 million).

Mark Norbom, the manager of General Electric in Indonesia,
said yesterday his company bought the 7 percent share from the
public, who had owned 43 percent of Bank Bira's total shares.

He said the purchase would let GE Capital form a strategic
alliance with the bank.

General Electric had planned to buy 10 percent of the bank,
Norbom said after a strategic alliance agreement was signed.

"But we only got 7 percent. We're still interested in buying
up to 15 percent of Bank Bira's total shares," he said.

The strategic alliance would initially focus on consumer
finance, primarily credit cards and mortgage finance, he said.
"Through Bank Bira, we plan to quickly expand the market of our
products and services," he said.

"Bank Bira and GE Capital compliment each other perfectly. The
partnership is a combination of Bank Bira's extensive network and
local knowledge supported by GE Capital's strong systems and
technology," Norbom said.

General Electric had invested $300 million in the country's
financial and industrial sector, he said.

Bank Bira's founders own 57 percent of the bank's shares which
have a nominal price of Rp 1,000 each.

GE Capital Services, a wholly owned subsidiary of General
Electric, provides equipment management, mid-market and
specialized financing, specialty insurance and consumer services
such as car leasing, home mortgages and credit cards around the
world.

General Electric is a diversified manufacturing, technology
and services company with operations worldwide. Its makes
machinery, locomotives, light bulbs and refrigerators.

Bank Bira president Bambang Panutomo said that GE Capital,
with its modern technology and total assets worth $185 billion,
would help the bank serve the rapidly growing consumer finance
market.

Bank Bira, with Rp 2.6 trillion worth of assets on Sept. 30,
reported that its net profit had increased 100 percent for the
first nine months of this year to Rp 43.99 billion from Rp 21.97
billion for the same period last year.

This was 9 percent higher than its projection of Rp 40.36
billion.

He said the bank had projected to make a Rp 53.8 billion net
profit this year. "But we hope to achieve Rp 60 billion net
profit by the year's end," he said, adding that the bank expected
to raise its net profit 25 percent next year. (bnt)