OCBC acquires 22.5% stake in Bank NISP

The Jakarta Post, Jakarta

Overseas-Chinese Banking Corp. Ltd (OCBC), Singapore's third- largest bank, has wrapped up the purchase of a 22.5 percent shareholding in Indonesia's medium-sized Bank NISP for S$119 million (about US$75 million).

NISP president Pramukti Surjaudaja told The Jakarta Post on Tuesday that OCBC had signed a sales and purchase agreement with NISP on Monday.

"We have decided to go into partnership with OCBC in order to expand our network by strengthening our financial ability, and to give a value-added service to our customers," said Pramukti.

He expected that the partnership with OCBC could bring NISP to gradually become the country's 10th-largest bank in terms of assets in the next year or two. Currently, NISP is the country's 12th-largest bank.

OCBC decided to purchase the shares because the bank already had experience of working with NISP when setting up a joint venture bank in Indonesia in 1996, he said.

Pramukti also hinted that there was a possibility that OCBC might acquire a majority stake in NISP over time.

NISP shares on the Jakarta Stock Exchange (JSX) ended higher by Rp 10 at Rp 440 in Tuesday's trading.

The bank, which was set up in 1941, recently said that its net profit might grow by up to 40 percent this year on an increase in revenue from lending and the lower cost of funds amid a continuous decline in central bank benchmark interest rates.

The bank recorded an unaudited profit of Rp 170.7 billion ($21 million) last year, up from Rp 93 billion in 2002.

OCBC recently made an aggressive move to acquire financial firms in a bid to catch up with its Singaporean rivals DBS Group Holdings Ltd. and United Overseas Bank Ltd.

Last month OCBC was planned to buy a 51 percent shareholding in insurance company Great Eastern Holdings Ltd. for S$2.9 billion.