StanChart eyes local and foreign partner for BCA

Berni K. Moestafa, The Jakarta Post, Jakarta

British-based Standard Chartered Bank Plc (StanChart) said on Friday that it was looking for a strategic partner, either here or abroad, in bidding for a controlling stake in Bank Central Asia (BCA).

StanChart's chief executive for Indonesia, Ray Ferguson, confirmed reports that the bank was searching for a partner in its bid to acquire BCA.

"We're looking for potential investors that bring something strategic to the overall arrangement," Ferguson said at a press conference, noting that they have been both "foreign and local."

He declined to name any particular company with which the bank was currently in talks, including reports it had already teamed up with the Government of Singapore Investment Corporation (GIC).

"Maybe insurance companies in Indonesia, or insurance companies from outside Indonesia, (but) not other banks," he said.

The composition of StanChart's stake in BCA, should it team up with a partner, he said, also remains undecided.

Asked why StanChart wanted a partner, one reason Ferguson cited was that it did not want to appear "too heavy" in front of BCA.

StanChart's attempt to control Bank Bali in 1999 ran aground in part because the Indonesian bank's employees rejected the foreign management they deemed as arrogant and too aggressive.

Some analysts, however, said StanChart risked being downgraded if it pushed ahead for a 51 percent stake in a local bank.

Rampant security problems, legal uncertainties and political instability have made Indonesia a risky place to invest in.

The Indonesian Bank Restructuring Agency (IBRA) plans to sell BCA, its third attempt since 2000, to an investor it hopes could bring in added value to the local bank.

BCA was the country's largest private bank and will regain that title once IBRA finalizes the sale.

The bank's strongest asset is its huge customer base, and its wide network of office branches and ATMs across the country.

IBRA took over BCA, after its former owner, the Salim Group, misused government sponsored emergency loans for the bank to help it cope with the massive rush during the 1997 financial crisis.

The agency has so far sold a 32.5 percent stake at the local stock market through two share offerings in 2000 and last year.

IBRA should have finalized the sale to a strategic investor by last year, but delayed it on appeals by the bidders for a longer due diligence period on BCA.

As the only bank among the eight bidders for BCA, StanChart has come forward as the most strongest candidate.

Sources close to BCA's sale process told The Jakarta Post, that the government leaned in favor for the British bank.

StanChart Group chief executive Mervyn Davies visited Indonesia earlier this week. But Ferguson denied reports that Davies had met IBRA chief I Gede Putu Ary Suta, or State Minister for Enterprises Laksamana Sukardi.

He added that nothing was final as of yet. "During the two weeks (until Jan. 28, the bidding deadline) we will make our final decision, if we want to bid and who if any we want to bid with....and that won't be decided till anywhere near right up to the last minute."

StanChart is scouting the Southeast Asian region for other banks it deemed attractive because their prices have fallen sharply.