Standard Chartered leads Bank Bali management
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) entered into a strategic partnership with Standard Chartered Bank on Monday, whereby the United Kingdom-based bank will head Bank Bali's new management team.
IBRA said in a press statement this was part of the agreement which will see the foreign bank partly finance the recapitalization of publicly listed Bank Bali.
"IBRA has formed a strategic partnership with Standard Chartered Bank to recapitalize Bank Bali," said the agency, which took over Bank Bali on Friday.
The agency said Standard Chartered appointed its Southeast Asia head for corporate and institutional banking Douglas Beckett to lead the new management team of Bank Bali.
Bank Bali will soon offer a rights issue to raise some Rp 4.3 trillion to lift its capital adequacy ratio (CAR) to the government-set 4 percent minimum, according to the agency.
IBRA said it signed an investment agreement with Standard Chartered in which the UK bank would purchase part of the rights issue and take a 20 percent stake in Bank Bali, while IBRA would purchase the remaining rights issue.
Standard Chartered said in April it had put aside some US$56 million to purchase 20 percent of Bank Bali.
"Standard Chartered will have the right to buy up to 100 percent of IBRA's shares in Bank Bali in the future through a call option," the statement said.
Beckett will be assisted by several of Bank Bali's executives, including IGM Mantera and Hendri Kurniawan, both directors at the bank, according to IBRA.
However, former Bank Bali president Rudy Ramly will not be included on the management team.
The agency said it had also formed a supervisory team consisting of representatives from Standard Chartered and IBRA.
The IBRA representatives on the team will include J.B. Sumarlin and I.N. Suwandhana, the former president commissioner and commissioner of Bank Bali, respectively.
The agency said it would submit the names of those on the new management team to Bank Indonesia for final approval.
IBRA chairman Glenn S. Yusuf said the agreement with Standard Chartered reflected the confidence of foreign investors in the potential of the country's banking sector.
He added that the deal was also further progress in the effort to restructure and recapitalize the country's banking sector.
"We have confidence in Indonesia's economy and this strategic partnership will considerably strengthen Standard Chartered's presence in Indonesia," Standard Chartered chief executive Rana Talwar was quoted by Reuters as saying in London on Monday.
In its efforts to restructure the banking industry, the government has recapitalized seven private banks and four nationalized banks. It has financed between 80 percent and 100 percent of the recapitalization program by issuing some Rp 103 trillion in bonds. (rei)