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)