Standard Chartered to 'keep Permata independent'
Tony Hotland, The Jakarta Post/Jakarta
British bank Standard Chartered Plc (Stanchart) dismissed the idea of merging its Indonesian operation with Bank Permata's, saying it would keep the two separate.
"It's been made crystal clear that we'll keep it as an independent entity. We think the value of Permata is in that way. It has a good brand name, good recognition and will remain independent as well as Stanchart itself," Stanchart Indonesia chief executive officer Stewart D. Hall told The Jakarta Post on Sunday.
He said despite its youth, Permata had a solid foothold in Indonesia's consumer market.
Permata, the country's seventh largest bank by assets, was established in 2002 as a merger of five banks -- Bank Universal, Bank Bali, Bank Patriot, Bank Arthamedia and Bank Prima Express.
"Permata is competitively very well-positioned to take advantage of. They have a successful franchise, and we're confident of it," Hall said.
A consortium comprising Stanchart and automotive giant PT Astra International was selected last week as the preferred bidder for the government's 51 percent stake in the bank, with an offer that valued Permata at 2.73 times its June book value.
The government expects gross proceeds of Rp 2.77 trillion (US$304.73 million) from the sale.
Hall said under the consortium, Permata would continue its current business strategy, while Stanchart would provide resources in support, including the British bank's international network and treasury risk management skills.
He said the two banks shared similarities in their business strategies, which would be an advantage to the cooperation.
"Eighty percent of Stanchart's profits come from the wholesale banking side, such as multinationals and local corporations. Our consumer side is growing, but it's more in the upper segment like wealth management.
"It overlaps a little bit with Permata, but Permata has more focus on the consumer and small- and medium enterprises segments. We'll look to an effective, realized synergy through each other's networks," he said.
Hall is optimistic that Astra's involvement would help Permata in pursuing its business strategy.
"Astra has a very successful consumer financing business... they are the leading player in the consumer sector -- they truly understand consumer behavior and have a good network. Together, obviously we can bring something to the table," he said.
The consortium must undergo the central bank's fit and proper test before it can be declared the official winner of the tender.
Hall is confident of passing the test: "We've been here for 140 years. As an institution -- and also our senior managers -- we have already been subjected to a fit and proper test ... for the purpose of this investment, we have to go through another procedure as a consortium. We're quite confident that it won't be a problem," he told the Post.
He added the consortium would appoint four representatives to Permata's board of commissioners and another four to the board of directors.
Hall said the purchase of Permata was part of Stanchart's long-term commitment to Indonesia.
"We have no intentions of divesting this bank. If the opportunity arises as a consortium to increase our equity stake, we would even like to do that.
"We've always believed in the long-term potential of Indonesia, and we think the immediate short-term outlook over the next couple of years is quite favorable. The price we agreed to pay reflects that belief. We've been here for 140 years and we'll be here for another 140 years."