S'pore's DBS Group may bid for 51% stake in Danamon
S'pore's DBS Group may bid for 51% stake in Danamon
Bloomberg, Jakarta
DBS Group Holdings Ltd.,Southeast Asia's biggest bank, may bid for the 51 percent stake Indonesia is selling in PT Bank Danamon, the nation's fifth-largest lender, an Indonesian government official said.
The Singapore lender is one of 70 potential foreign and local investors invited by J.P. Morgan Chase & Co., the investment bank advising the government on the stake sale, to bid for Bank Danamon. Others include Standard Chartered Plc, HSBC Holdings Plc and Australia & New Zealand Banking Group Ltd.
"It has submitted a letter of interest," I Nyoman Sender, deputy chairman of the Indonesian Bank Restructuring Agency (IBRA) said.
"We prefer banks to other financial institutions" in selling the stake, he said.
IBRA would raise Rp 3.5 trillion (US$399.1 million) from the stake sale at current market prices. Danamon is one of seven banks Indonesia plans to sell this year, as it tries to raise funds to help plug a Rp 34.4 trillion budget deficit and meet pledges made to the International Monetary Fund in return for $4.7 billion of loans.
In Singapore, DBS Group declined to comment. "We don't comment on speculation," spokeswoman Julie Yeo said.
IBRA, which delayed the sale from last year, owns 99.4 percent of Danamon. The agency also plans to sell a 20-percent stake on the stock market.
Bank Danamon shares rose Rp 20, or 7.7 percent, to Rp 280 at close of trading on the Jakarta Stock Exchange. The shares have risen 3.6 percent in the past year.
Indonesia's government seized 11 of the country's 12 largest banks and injected almost $40 billion worth of interest-bearing government bonds to give them a source of income after the rupiah's devaluation in 1997-1998 left most local companies unable to pay loans.
ANZ Bank, Australia's fourth-largest lender, last year dropped out of the race to buy Indonesia's PT Bank Niaga after its initial bid was rejected as too low. Commerce-Asset Holdings Bhd., Malaysia's No. 2 bank, was the only bidder for Niaga, offering Rp 1.057 trillion for a majority stake.
"We remain interested in acquiring banking assets in Indonesia at a reasonable price and at low risk," Paul Edwards, spokesman for Australia's fourth-largest lender, said by e-mail.
"It's too early to comment on whether we have a specific interest in Bank Danamon although it seems unlikely at this stage."
Indonesia also plans to sell PT Bank Lippo, the seventh- largest lender by market value, PT Bank Mandiri, the country's biggest lender by assets, and PT Bank Negara Indonesia, the largest publicly traded lender. It may also sell PT Bank Rakyat Indonesia, PT Bank Permata and Bank International Indonesia.
The asset disposals may be hampered by a shrinking economy and waning investor confidence after an Oct. 12 bomb blast in Bali killed at least 190 people, mostly Australian tourists.
Foreign investment fell 35 percent to $9.7 billion last year, the lowest in nine years.
ANZ Bank's continued interest in Indonesian assets is encouraging against that backdrop, said Tjandra Lienandjaja, an analyst at G.K. Goh Securities, a local brokerage.
"If it goes ahead, it will help expand its retail business in the region," he said.