Bangkok Bank has wrapped up its previously announced acquisition of a stake of 89.12% in Indonesian lender Bank Permata for $2.28bn from Standard Chartered and Astra International.
Under the deal announced in December 2019, Bangkok Bank acquired 44.56% stakes each from Standard Chartered and Astra International in Bank Permata, which is considered to be the 12th largest bank in Indonesia in terms of total assets.
The original price of the acquisition was around $2.4bn which was reduced last month owing to certain factors. Standard Chartered group chief executive Bill Winters said: “The Permata team has done a tremendous job and we believe the business’s long-term potential remains strong, but it was no longer core to our strategy in Indonesia which will now focus on our wholly-owned branch business.
“Transferring our stake to a highly respected and motivated new owner will enable Permata to continue its impressive development.”
Standard Chartered Bank through the sale of its stake, raised cash proceeds of IDR17 trillion ($1.07bn). As of 31 March 2020, Bank Permata has an asset base of IDR167.39bn ($11.35bn). The Indonesian bank is said to serve 3.75 million customers and has 312 branches across the country.
Bangkok Bank said that as a next step, it will apply to Otoritas Jasa Keuangan (OJK), Indonesia’s financial regulator, seeking its approval to undertake a mandatory tender offer for the remaining 10.88% stake in the Indonesian lender.
The Thailand-based banking company also said that its Indonesian branches will be combined with Bank Permata in the future.
Bangkok Bank president Chartsiri Sophonpanich said: “Permata will give Bangkok Bank a stronger presence in Southeast Asia’s two largest economies, reinforcing our position as a leading ASEAN bank.
“We will support Permata to grow its retail, SME and corporate business, while Bangkok Bank’s customers will have enhanced access to growth opportunities in Indonesia. We are also looking forward to continuing to expand the business partnership between Permata and Astra.”
Bangkok Bank expects its investment to enable the Indonesian lender to tap into its expertise in corporate and SME banking, robust regional network, and relationships with leading corporates across Asia, and also its cross-border product and sectoral expertise.