More mergers of banks anticipated
More mergers of banks anticipated
JAKARTA (JP): The country's banking sector will see more bank
mergers in coming months, with about 20 private banks having
confirmed their plans to merge their businesses into four
entities.
The widely diversified Bakrie Group is expected to merge its
four banks next month, the Tirtamas Group is preparing to merge
its three banks and the Ramako Group also plans to merge its two
banks into one.
Bank Bukopin announced yesterday it would merge with Bank
Duta, while giant Bank Internasional Indonesia (BII) had begun
its merger process with Bank Dagang Nasional Indonesia (BDNI) and
three other small banks.
A reliable source said yesterday that Bank Danamon would
announce their merger plan today with Bank Lippo and some smaller
banks.
The government announced earlier that it would merge four
state banks -- Bank Ekspor Impor Indonesia, Bank Dagang Negara,
Bank Bumi Daya and Bank Pembangunan Indonesia -- into a single
entity by July.
The government would also make Bank Tabungan Negara a
subsidiary of Bank Negara Indonesia (BNI).
BNI president Widigdo Sukarman said last night that the
planned merger of state banks showed the government's seriousness
in strengthening the country's banking industry.
He also hailed merger plans among private banks, which he saw
as a good indication of consolidation among private banks in time
of economic difficulties.
"Say if 10 private banks merge into one bank, then we'll only
have 20 private banks and three state banks. That would be good
because we would have less banks, but more branches," Widigdo
said.
Thomas Suyatno, head of the advisory board of the Federation
of Private Domestic Banks, said Monday at least 50 private banks
would merge into about 12 institutions by June.
Banking sources said more private banks would eventually be
forced to merge as the government was expected to raise
commercial bank's equity requirements by the end of this month to
Rp 2 trillion (US$209 million) from the current Rp 150 billion.
When announcing the merger plan yesterday, Bank Bukopin's
president Indra Kesuma said his bank's planned merger with Bank
Duta would raise the merged bank's combined assets to Rp 11
trillion.
"We are still evaluating the merger plan and hopefully it will
be finalized as soon as possible. We are still waiting for
shareholders' approval," he said.
He said Bank Bukopin had assets of Rp 5 trillion last year
while Bank Duta's total was Rp 6 trillion.
Nirwan D. Bakrie, chief commissioner of Bakrie Capital
Indonesia, a finance subsidiary of the Bakrie Group, said the
group would merge Bank Nusa Internasional, Bank Nasional, Bank
Nasional Komersial (Bank Perniagaan) and Bank Angkasa into one
bank next month.
Nirwan told Kompas daily that the merger would strengthen
their capital and operations and also would support the
government's program to strengthen the banking sector.
"The merger process will be discussed at the shareholders
meeting of each bank, which will be held Jan. 24. If the meetings
approve the plan, the merger will be realized next month," he
said, declining to mention which bank would survive the merger.
Besides the four banks, the Bakrie Group has two other banks,
Bank Tabungan Pensiunan Nasional (BTPN) and Maybank Nusa, a joint
venture between Bank Nusa and Malaysian bank Maybank.
Nirwan said BTPN would not be included in the merger but would
become a subsidiary of the merged bank, due to its specific
market in financing in the retail sector.
Nirwan said the merger would increase the merged bank's paid-
up capital to about Rp 1.4 trillion and total assets to Rp 6
trillion.
"The merger will also raise the capital adequacy ratio of the
new bank to 25 percent, which is considered very healthy," he
said.
BII said Sunday that it had signed a memorandum of
understanding with BDNI to combine their businesses into one
entity, which was also joined by Bank Tiara Asia and unlisted
Bank Sahid Gajah Perkasa and Bank Dewa Rutji.
With the merger, BII president Indra Widjaja said BII would
operate more efficiently, cut costs and increase profits. It
would then invite international banks to join the merged bank as
partners.
Sukamdani S. Gitosardjono, head of Bank Sahid, said the merger
process would take about two to three months.
Three banks under the Tirtamas Group -- Bank Papan Sejahtera,
Bank Pelita and Bank Kredit Asia -- are expected to merge this
year.
The Ramako Group will merge Bank IFI and Bank Asta this year
as part of the group's move to strengthen its banking business.
Indonesia still has more than 200 commercial banks after the
government closed down 16 private banks late last year in the
first tentative attempt in its reform package, arranged by the
International Monetary Fund. (gis/rid)