Standard Chartered to 'keep Permata independent'

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."