JAKARTA-
The net profit of Bank Rakyat Indonesia (BRI) (JSX:BBRI) shot up 25.1 per cent year-on-year to Rp5.3 trillion (US$570 million) in the first nine months of this year on strong growth of net interest income.
The state lender posted a 13.6 per cent rise in net interest income to Rp16.69 trillion thanks to a surge in credit expansion as against cost of fund of Rp9.05 trillion.
The bank posted a 26.9 per cent increase in outstanding credit by the end of the nine month period to Rp219.56 trillion.
A stronger increase of 96.14 per cent was recorded in fee based income and other operating income to Rp2.72 trillion, the newspaper Bisnis Indonesia reported.
BRI President Sofyan Basir said the bank posted an increase in net profit when its net interest margin was cut to 9.21 per cent from 10.61 per cent.
Tuesday, November 3, 2009
Friday, October 30, 2009
BANK RAKYAT INDONESIA HIKES ITS BOND VALUE TO US$321 MLN
JAKARTA-
PT Bank Rakyat Indonesia (BRI)(JSX:BBRI), a publicly traded lender, said it will raise the value of bonds it plans to issue to Rp3 trillion (US$321 million) from Rp2 trillion set earlier.
The state bank, however, is still awaiting a go ahead from the capital market watchdog Bapepam to issue the bond scheduled for next month or December.
BRI Director Abdul Salam said the improved condition of the market prompted the bank management to raise the value.
With the bond fund, BRI hoped to maintain a safe capital adequacy ratio at 15 per cent, Salam said.
In June BRI's CAR was 14 per cent and the level was believed to have declined with dividend paid to the government.
PT Bank Rakyat Indonesia (BRI)(JSX:BBRI), a publicly traded lender, said it will raise the value of bonds it plans to issue to Rp3 trillion (US$321 million) from Rp2 trillion set earlier.
The state bank, however, is still awaiting a go ahead from the capital market watchdog Bapepam to issue the bond scheduled for next month or December.
BRI Director Abdul Salam said the improved condition of the market prompted the bank management to raise the value.
With the bond fund, BRI hoped to maintain a safe capital adequacy ratio at 15 per cent, Salam said.
In June BRI's CAR was 14 per cent and the level was believed to have declined with dividend paid to the government.
Friday, October 23, 2009
Five Indonesian banks set to launch Islamic units
* BI says sharia units can become sharia banks in one month
* Revised law on VAT encouraging banks to set up sharia units
* Paper reports U.S. insurer looking at buying sharia bank
JAKARTA - Five Indonesian banks including Bank Central Asia (BBCA.JK), the No. 3 lender, expect to launch standalone sharia units next year, boosting the sharia market in the world's most populous Muslim nation, officials said.
Industry officials said the revised law on value added tax, which removed double taxation in the Islamic market, would encourage more banks to set up Islamic banking subsidiaries. The double taxation had made Islamic transactions more expensive than comparable conventional deals.
"We hope that it would be easier for us to expand business and seek strategic partners. We also hope to grow faster and attract investors from Middle East," said Barno Sudarwanto, head of planning and development at the sharia unit of Bank Negara Indonesia (BBNI.JK), the No. 4 bank, which will be spun off.
Others due to set up separate sharia banking units include mid-sized lenders Bank Panin (PNBN.JK), Bank Victoria (BVIC.JK) and unlisted Bank Jabar Banten.
Investor Daily newspaper on Friday reported that a U.S. insurance firm had met with central bank officials this week to discuss the possibility of buying an Islamic-compliant lender in Indonesia, without giving details.
Conventional banks typically set up their Islamic subsidiaries by first setting up Islamic banking departments and later on converting them into separate Islamic banks. Others, including BCA, may acquire smaller conventional banks and turn them into Islamic subsidiaries.
"I expect to see more banks spinning off their sharia units as the new VAT law which scraps double taxation from sharia transactions will take effect next year," said Adiwarman Karim, chief of Karim Business Consulting.
The firm offers consultancy services on the Islamic market, including the establishment of Islamic banks.
Indonesia currently has five sharia banks and 24 commercial banks with sharia units as of August 2009, out of around 130 commercial banks operating in Southeast Asia's biggest economy.
ACQUISITIONS
BCA vice president director Jahja Setiaatmadja told Reuters the bank was in the final stage of setting up such a unit, adding that operations may start in January. He declined to give further details.
BCA, with a stock market value of $12 billion, acquired Bank UIB in October 2008 and planned to convert the small lender into a sharia bank.
Ramzi A. Zuhdi, director in charge of Islamic banking at the Indonesian central bank, said it took about a month for banks to obtain approvals to convert their Islamic banking units into Islamic banks if all the administrative requirements were met
In neighbouring Malaysia, seen as the Islamic financial hub in Asia, domestic banks can immediately convert their Islamic units operating under the parent companies into separate entities, said Vaseehar Hassan Abdul Razack, chairman of Unicorn International Islamic Bank Malaysia.
Riawan Amin, the chairman of Indonesia's association of Islamic banks (Asbisindo), said it often took longer than initially expected to launch Islamic banks in the country due partly to administrative reasons such as in recruiting employees.
October 23th 2009 By Reuters.
* Revised law on VAT encouraging banks to set up sharia units
* Paper reports U.S. insurer looking at buying sharia bank
JAKARTA - Five Indonesian banks including Bank Central Asia (BBCA.JK), the No. 3 lender, expect to launch standalone sharia units next year, boosting the sharia market in the world's most populous Muslim nation, officials said.
Industry officials said the revised law on value added tax, which removed double taxation in the Islamic market, would encourage more banks to set up Islamic banking subsidiaries. The double taxation had made Islamic transactions more expensive than comparable conventional deals.
"We hope that it would be easier for us to expand business and seek strategic partners. We also hope to grow faster and attract investors from Middle East," said Barno Sudarwanto, head of planning and development at the sharia unit of Bank Negara Indonesia (BBNI.JK), the No. 4 bank, which will be spun off.
Others due to set up separate sharia banking units include mid-sized lenders Bank Panin (PNBN.JK), Bank Victoria (BVIC.JK) and unlisted Bank Jabar Banten.
Investor Daily newspaper on Friday reported that a U.S. insurance firm had met with central bank officials this week to discuss the possibility of buying an Islamic-compliant lender in Indonesia, without giving details.
Conventional banks typically set up their Islamic subsidiaries by first setting up Islamic banking departments and later on converting them into separate Islamic banks. Others, including BCA, may acquire smaller conventional banks and turn them into Islamic subsidiaries.
"I expect to see more banks spinning off their sharia units as the new VAT law which scraps double taxation from sharia transactions will take effect next year," said Adiwarman Karim, chief of Karim Business Consulting.
The firm offers consultancy services on the Islamic market, including the establishment of Islamic banks.
Indonesia currently has five sharia banks and 24 commercial banks with sharia units as of August 2009, out of around 130 commercial banks operating in Southeast Asia's biggest economy.
ACQUISITIONS
BCA vice president director Jahja Setiaatmadja told Reuters the bank was in the final stage of setting up such a unit, adding that operations may start in January. He declined to give further details.
BCA, with a stock market value of $12 billion, acquired Bank UIB in October 2008 and planned to convert the small lender into a sharia bank.
Ramzi A. Zuhdi, director in charge of Islamic banking at the Indonesian central bank, said it took about a month for banks to obtain approvals to convert their Islamic banking units into Islamic banks if all the administrative requirements were met
In neighbouring Malaysia, seen as the Islamic financial hub in Asia, domestic banks can immediately convert their Islamic units operating under the parent companies into separate entities, said Vaseehar Hassan Abdul Razack, chairman of Unicorn International Islamic Bank Malaysia.
Riawan Amin, the chairman of Indonesia's association of Islamic banks (Asbisindo), said it often took longer than initially expected to launch Islamic banks in the country due partly to administrative reasons such as in recruiting employees.
October 23th 2009 By Reuters.
Thursday, October 22, 2009
SBI eyes second buy in Indonesia
Mumbai: State Bank of India (SBI), the country's largest bank, is actively considering a buyout in Indonesia. The deal size is expected to be over $100 million.
A senior SBI executive told FE, “The bank has already shortlisted three to four Indonesian banks for the proposed acquisition.” The deal would be SBI's second acquisition in Indonesia. In 2006, SBI had acquired 76% stake in PT Bank Indo Monex, an Indonesia bank, which was renamed as Bank SBI Indonesia—a SBI subsidiary.
"The Indonesian bank, which SBI is eyeing, would be merged with Bank SBI Indonesia that currently offers retail and wholesale banking services through 12 branches in the country," the SBI executive said.
In a bid to capitalise on the rising trade and investment between Indonesia and India, Bank SBI Indonesia had launched its foreign exchange trade facility last month. This facility enables the bank to offer foreign exchange services, trade finance and remittance facilities, and depository advisory services. Indonesia is India's second largest export market in Asean after Singapore. India is one of the largest importers of Indonesian commodities including palm oil, coil and gambier.
Indonesia is ranked 16th as a source of imports for India at $6.1 billion as on March 30, 2009, up 38% over the previous year. Currently, India's investments in Indonesia are at an impressive $2 billion. Indo-Indonesian trade crossed $10.6 billion last fiscal.
Sources reveal that SBI is also assessing a possibility to penetrate in countries such as Thailand and Vietnam. The bank is likely to open a representative office in Malaysia by March 2010. SBI's thrust to capture the lucrative business from the Far East region is evident from its Singapore subsidiary's balance sheet size that crossed $2 billion-mark as on September 30, 2009. SBI Singapore's trade finance business grew over 50% in the last six months.
To promote retail lending in Singapore, SBI is expected to open three new branches and two more off-site ATMs at a cumulative investment of over sing$35 million, and recruit over 60 personnel across various levels in the next 3-4 months. The bank launched its mortgage service on August 9, 2009. Till-date, it has transacted business worth over sing$10 million. SBI Singapore currently operates six branches and five off-set ATMs in the country.
As on March 30, 2009, SBI had 92 overseas offices across 32 countries, comprising of 37 branches, five sub offices, eight representative offices, 35 branches of subsidiaries, three managed exchange.
A senior SBI executive told FE, “The bank has already shortlisted three to four Indonesian banks for the proposed acquisition.” The deal would be SBI's second acquisition in Indonesia. In 2006, SBI had acquired 76% stake in PT Bank Indo Monex, an Indonesia bank, which was renamed as Bank SBI Indonesia—a SBI subsidiary.
"The Indonesian bank, which SBI is eyeing, would be merged with Bank SBI Indonesia that currently offers retail and wholesale banking services through 12 branches in the country," the SBI executive said.
In a bid to capitalise on the rising trade and investment between Indonesia and India, Bank SBI Indonesia had launched its foreign exchange trade facility last month. This facility enables the bank to offer foreign exchange services, trade finance and remittance facilities, and depository advisory services. Indonesia is India's second largest export market in Asean after Singapore. India is one of the largest importers of Indonesian commodities including palm oil, coil and gambier.
Indonesia is ranked 16th as a source of imports for India at $6.1 billion as on March 30, 2009, up 38% over the previous year. Currently, India's investments in Indonesia are at an impressive $2 billion. Indo-Indonesian trade crossed $10.6 billion last fiscal.
Sources reveal that SBI is also assessing a possibility to penetrate in countries such as Thailand and Vietnam. The bank is likely to open a representative office in Malaysia by March 2010. SBI's thrust to capture the lucrative business from the Far East region is evident from its Singapore subsidiary's balance sheet size that crossed $2 billion-mark as on September 30, 2009. SBI Singapore's trade finance business grew over 50% in the last six months.
To promote retail lending in Singapore, SBI is expected to open three new branches and two more off-site ATMs at a cumulative investment of over sing$35 million, and recruit over 60 personnel across various levels in the next 3-4 months. The bank launched its mortgage service on August 9, 2009. Till-date, it has transacted business worth over sing$10 million. SBI Singapore currently operates six branches and five off-set ATMs in the country.
As on March 30, 2009, SBI had 92 overseas offices across 32 countries, comprising of 37 branches, five sub offices, eight representative offices, 35 branches of subsidiaries, three managed exchange.
Sunday, October 18, 2009
Malaysia's RHB to pay $356mln for Bank Mestika
KUALA LUMPUR-
Malaysia's fourth-biggest lender RHB Capital (RHBC.KL) will pay 1.2 billion ringgit ($356.1 million) in cash for a controlling stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.
RHB said in a statement ahead of a press conference on Monday that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share.
Malaysia's top two banks, Malayan Banking (Maybank) (MBBM.KL) and CIMB (CIMB.KL), already have a presence in the underbanked Indonesian market.
Analysts said loans growth in Indonesia's banking market, with its huge population, are expected to grow 15-25 percent this year.
Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.
Malaysia's fourth-biggest lender RHB Capital (RHBC.KL) will pay 1.2 billion ringgit ($356.1 million) in cash for a controlling stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.
RHB said in a statement ahead of a press conference on Monday that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share.
Malaysia's top two banks, Malayan Banking (Maybank) (MBBM.KL) and CIMB (CIMB.KL), already have a presence in the underbanked Indonesian market.
Analysts said loans growth in Indonesia's banking market, with its huge population, are expected to grow 15-25 percent this year.
Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.
Thursday, October 15, 2009
IMF Indonesia rep says strong rupiah can help contain inflation
JAKARTA-
The appreciation of Indonesia's rupiah could help contain price pressure in Southeast Asia's biggest economy, the International Monetary Fund's senior resident representative in Indonesia said on Wednesday.
Milan Zavadjil, the IMF's representative, also told Reuters in an email that the central bank, Bank Indonesia (BI), was right to direct intervention to trying to reduce volatility in the rupiah, which is Asia's best-performing currency so far this year.
'In the current situation of strong capital inflows, the appreciation of the rupiah can help contain domestic price rises. BI is right to direct intervention largely at reducing volatility,' he said.
Zavadjil noted that the country's exchange rate flexibility has helped it in the past to deal with large capital flows.
'Exchange rate flexibility has served as an important shock absorber for Indonesia,' he said.
'During the worse of the global financial crisis, the flexibility of the currency helped absorb large capital outflows, thus avoiding a large loss in reserves and a loss in confidence.' October 14th 2009.
The appreciation of Indonesia's rupiah could help contain price pressure in Southeast Asia's biggest economy, the International Monetary Fund's senior resident representative in Indonesia said on Wednesday.
Milan Zavadjil, the IMF's representative, also told Reuters in an email that the central bank, Bank Indonesia (BI), was right to direct intervention to trying to reduce volatility in the rupiah, which is Asia's best-performing currency so far this year.
'In the current situation of strong capital inflows, the appreciation of the rupiah can help contain domestic price rises. BI is right to direct intervention largely at reducing volatility,' he said.
Zavadjil noted that the country's exchange rate flexibility has helped it in the past to deal with large capital flows.
'Exchange rate flexibility has served as an important shock absorber for Indonesia,' he said.
'During the worse of the global financial crisis, the flexibility of the currency helped absorb large capital outflows, thus avoiding a large loss in reserves and a loss in confidence.' October 14th 2009.
3 Indonesia banks agree to US$329 mln loan for coal power plants
JAKARTA- Three Indonesian state-owned banks agreed Wednesday to extend a syndicated loan of Rp3.94 trillion (US$328.5 million) to finance the construction of coal-fired power plants (PLTUs) in Lampung and North Sumatra provinces. BANK RAKYAT INDONESIA (BRI)(JSX:BBRI) and Rp1.28 from BANK NEGARA INDONESIA (BNI)(JSX:BBNI) and BANK MANDIRI (JSX:BMRI) will each contribute Rp1.38 trillion.
* BRI director Asmawi Syam, BNI director Riswandi and Bank Mandiri vice president director I Wayan Agus Mertayasa signed an agreement on the syndicated loan with state electricity company PT PERUSAHAAN LISTRIK NEGARA (PLN) president director Fahmi Mochtar in the presence of Coordinating Minister for Economic Affairs/Finance Minister Sri Mulyani on Wednesday.
* Riswandi said the syndicated loan will account for 85 per cent of the total funds needed to construct PLTU Tarahan in Lampung and PLTU Pangkalan Susu in North Sumatra.
* BRI director Asmawi Syam, BNI director Riswandi and Bank Mandiri vice president director I Wayan Agus Mertayasa signed an agreement on the syndicated loan with state electricity company PT PERUSAHAAN LISTRIK NEGARA (PLN) president director Fahmi Mochtar in the presence of Coordinating Minister for Economic Affairs/Finance Minister Sri Mulyani on Wednesday.
* Riswandi said the syndicated loan will account for 85 per cent of the total funds needed to construct PLTU Tarahan in Lampung and PLTU Pangkalan Susu in North Sumatra.
Saturday, October 10, 2009
Nishat Group Chmn:To Join Maybank In Buying Stakes In Overseas Bks
KARACHI (Dow Jones)-
Pakistan's Nishat Group said Wednesday it will tie up with Malaysia's Malayan Banking Bhd. (1155.KU), or Maybank, to buy stakes in overseas banks.
"We now plan to move ahead with acquiring stakes in some banks in the Middle East and Indonesia," Nishat Group Chairman Mian Mansha told reporters.
He declined to name the potential targets or the likely investment that could be made.
Mansha said the group's MCB Bank (MCB.KA), in which Maybank is a shareholder, is likely to complete the buyout of the Royal Bank of Scotland Group PLC's (RBS) Pakistan operations in two weeks.
The MCB Bank had bought Royal Bank of Scotland's Pakistan assets in August this year.
Pakistan's Nishat Group said Wednesday it will tie up with Malaysia's Malayan Banking Bhd. (1155.KU), or Maybank, to buy stakes in overseas banks.
"We now plan to move ahead with acquiring stakes in some banks in the Middle East and Indonesia," Nishat Group Chairman Mian Mansha told reporters.
He declined to name the potential targets or the likely investment that could be made.
Mansha said the group's MCB Bank (MCB.KA), in which Maybank is a shareholder, is likely to complete the buyout of the Royal Bank of Scotland Group PLC's (RBS) Pakistan operations in two weeks.
The MCB Bank had bought Royal Bank of Scotland's Pakistan assets in August this year.
Maybank CEO: No immediate plans for new acquisitions
KUALA LUMPUR-
Malayan Banking Bhd (Maybank) chief executive officer Datuk Seri Abdul Wahid Omar has dismissed reports that the group is looking to purchase new banking assets after spending RM11.1bil last year on acquisitions overseas.
“We did three acquisitions last year, and we have enough on our plates. The focus for us now is organic growth,” Wahid, who is also the bank’s president, said at a press conference to launch Maybank’s latest premium debit card product.
Earlier this week, the chairman of Pakistan’s Nishat Group, Mian Mohammad Mansha, was quoted in a foreign news report as saying that MCB Bank Ltd and Maybank may team up to acquire banks in the Middle East and Indonesia.
“It is not true. I believe the chairman’s statement was taken out of context,’’ Wahid said.
Nishat Group owns an estimated 32% stake in MCB Bank, while Maybank owns a 20% share in the Pakistan-based lender.
Wahid also ruled out a possible bid for a strategic stake in Bank Islam Malaysia Bhd.
“This is something which we have not looked into,’’ he said.
Maybank Islamic Bhd is currently the country’s biggest Islamic bank with total assets of RM35bil, and “we believe there is tremendous opportunity to expand our Islamic banking operations organically,’’ according to Wahid.
Last week, Dubai Financial Group confirmed that it was in the process of reviewing its strategic options relating to its 40% stake in Bank Islam.
Maybank Islamic had been previously linked as a possible buyer.
Elaborating on the group’s organic expansion plans, Wahid said this might include setting up Islamic banking operations in Indonesia.
Maybank had earlier announced that its unit Bank Internasional Indonesia (BII) will add 200 new branches to its existing 250 outlets over the next three years.
Wahid is also planning to boost contributions from the group’s operations in the Philippines and Cambodia by opening new branches in the two countries.
Malaysia’s biggest bank is also strengthening its grip in the home market.
In the debit-card business, Maybank has a dominant market share of 80% in terms of total billings and a 26% share of the total 24.4 million debit-card holders in the country.
Wahid estimated that Maybank’s debit-card transactions amounted to about RM120mil a month.“For Maybank MasterCard Platinum Debit, we are targeting to recruit half a million card members in two years,’’ Wahid said, adding that the latest product, aimed at big spenders and rich customers, would boost Maybank’s debit-card billings by 80% by the end of 2010.
Malayan Banking Bhd (Maybank) chief executive officer Datuk Seri Abdul Wahid Omar has dismissed reports that the group is looking to purchase new banking assets after spending RM11.1bil last year on acquisitions overseas.
“We did three acquisitions last year, and we have enough on our plates. The focus for us now is organic growth,” Wahid, who is also the bank’s president, said at a press conference to launch Maybank’s latest premium debit card product.
Earlier this week, the chairman of Pakistan’s Nishat Group, Mian Mohammad Mansha, was quoted in a foreign news report as saying that MCB Bank Ltd and Maybank may team up to acquire banks in the Middle East and Indonesia.
“It is not true. I believe the chairman’s statement was taken out of context,’’ Wahid said.
Nishat Group owns an estimated 32% stake in MCB Bank, while Maybank owns a 20% share in the Pakistan-based lender.
Wahid also ruled out a possible bid for a strategic stake in Bank Islam Malaysia Bhd.
“This is something which we have not looked into,’’ he said.
Maybank Islamic Bhd is currently the country’s biggest Islamic bank with total assets of RM35bil, and “we believe there is tremendous opportunity to expand our Islamic banking operations organically,’’ according to Wahid.
Last week, Dubai Financial Group confirmed that it was in the process of reviewing its strategic options relating to its 40% stake in Bank Islam.
Maybank Islamic had been previously linked as a possible buyer.
Elaborating on the group’s organic expansion plans, Wahid said this might include setting up Islamic banking operations in Indonesia.
Maybank had earlier announced that its unit Bank Internasional Indonesia (BII) will add 200 new branches to its existing 250 outlets over the next three years.
Wahid is also planning to boost contributions from the group’s operations in the Philippines and Cambodia by opening new branches in the two countries.
Malaysia’s biggest bank is also strengthening its grip in the home market.
In the debit-card business, Maybank has a dominant market share of 80% in terms of total billings and a 26% share of the total 24.4 million debit-card holders in the country.
Wahid estimated that Maybank’s debit-card transactions amounted to about RM120mil a month.“For Maybank MasterCard Platinum Debit, we are targeting to recruit half a million card members in two years,’’ Wahid said, adding that the latest product, aimed at big spenders and rich customers, would boost Maybank’s debit-card billings by 80% by the end of 2010.
Wednesday, September 30, 2009
CIMB says Indonesia to account for 40 pct profit by 2015
SINGAPORE -
Malaysia's second-biggest bank CIMB BUCM.KL said on Tuesday Indonesia will account for 40 percent of the group's profit by 2015, making it bigger than the contribution from its home operation.
However, the group's CEO Nazir Razak told reporters at the launch of its Singapore retail operations that the lender is not looking for more acquisitions in Indonesia.
Sept 29th From Reuters
Malaysia's second-biggest bank CIMB BUCM.KL said on Tuesday Indonesia will account for 40 percent of the group's profit by 2015, making it bigger than the contribution from its home operation.
However, the group's CEO Nazir Razak told reporters at the launch of its Singapore retail operations that the lender is not looking for more acquisitions in Indonesia.
Sept 29th From Reuters
Monday, September 28, 2009
Japanese Yen Hit Eight Month Record
The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
Sept 28 (Reuters) - The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
(Writing by Mathew Veedon and Eric Burroughs)
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
Sept 28 (Reuters) - The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
(Writing by Mathew Veedon and Eric Burroughs)
INDONESIA'S BANK MANDIRI EYEING CONTROLLING STAKE IN AXA MANDIRI
JAKARTA-
Indonesia's PT Bank Mandiri (JSX:BMRI) said it is set to have controlling stake in life insurance company PT Axa Mandiri Financial Service (AMFS), it owns jointly with a French partner.
The state bank and the country's largest lender in assets, owns 49 per cent of Axa Mandiri and France's AXA holds the majority 51 per cent share.
Agus Martowardojo, the president of Bank Mandiri said the bank wants to acquire at least a 2 per cent stake from the AXA group, adding the acquisition process is expected to be completed before the end of this year.
AXA Mandiri has succeeded in banc-assurance business and grown to rank among three largest in life insurance market share in less than two years after its operation in the country. (28th September 2009)
Indonesia's PT Bank Mandiri (JSX:BMRI) said it is set to have controlling stake in life insurance company PT Axa Mandiri Financial Service (AMFS), it owns jointly with a French partner.
The state bank and the country's largest lender in assets, owns 49 per cent of Axa Mandiri and France's AXA holds the majority 51 per cent share.
Agus Martowardojo, the president of Bank Mandiri said the bank wants to acquire at least a 2 per cent stake from the AXA group, adding the acquisition process is expected to be completed before the end of this year.
AXA Mandiri has succeeded in banc-assurance business and grown to rank among three largest in life insurance market share in less than two years after its operation in the country. (28th September 2009)
Thursday, September 17, 2009
StanChart to advise Bayan on Indonesia coal financing
JAKARTA -
Indonesian coal miner PT Bayan Resources Tbk (BYAN.JK) said on Wednesday it has appointed Standard Chartered Bank (STAN.L) as a financial adviser for raising at least $150 million for a briquetted coal project.
Standard Chartered is advising PT Kaltim Supacoal -- a joint venture firm between Bayan and a unit of Australia's White Energy Ltd (WEC.AX) -- on financing for the expansion phase of Bayan's Tabang mine in East Kalimantan on Borneo island to 5 million tonnes in annual capacity, it said.
"Based on current information and proposed expansion plans, the final amount available under the facility is expected to be a minimum of $150 million," Bayan said in a statement.
The joint venture was established to turn high moisture coal produced in Bayan's Tabang mine into a higher energy clean burning product using technology provided by White Energy for use in coal-fired power plants.
Bayan plans to get production up to 15 million tonnes a year from an initial target of 5 million. It has completed construction of the first coal upgrading plant and has produced first batch upgraded clean coal briquettes last month at its plant which has a capacity of 1 million tonnes per annum.
The financing will be conditional upon the successful completion of due diligence by Standard Chartered Bank including the satisfactory operation of the new plant, the firm said.
Standard Chartered has also agreed to provide Kaltim Supacoal with an immediate interim working capital facility of $10 million to assist with its operating and production ramp-up expenses.
Bayan is one of Indonesia's largest coal miners, operating a 15 million tonnes per year coal terminal at Balikpapan in East Kalimantan.
Indonesian coal miner PT Bayan Resources Tbk (BYAN.JK) said on Wednesday it has appointed Standard Chartered Bank (STAN.L) as a financial adviser for raising at least $150 million for a briquetted coal project.
Standard Chartered is advising PT Kaltim Supacoal -- a joint venture firm between Bayan and a unit of Australia's White Energy Ltd (WEC.AX) -- on financing for the expansion phase of Bayan's Tabang mine in East Kalimantan on Borneo island to 5 million tonnes in annual capacity, it said.
"Based on current information and proposed expansion plans, the final amount available under the facility is expected to be a minimum of $150 million," Bayan said in a statement.
The joint venture was established to turn high moisture coal produced in Bayan's Tabang mine into a higher energy clean burning product using technology provided by White Energy for use in coal-fired power plants.
Bayan plans to get production up to 15 million tonnes a year from an initial target of 5 million. It has completed construction of the first coal upgrading plant and has produced first batch upgraded clean coal briquettes last month at its plant which has a capacity of 1 million tonnes per annum.
The financing will be conditional upon the successful completion of due diligence by Standard Chartered Bank including the satisfactory operation of the new plant, the firm said.
Standard Chartered has also agreed to provide Kaltim Supacoal with an immediate interim working capital facility of $10 million to assist with its operating and production ramp-up expenses.
Bayan is one of Indonesia's largest coal miners, operating a 15 million tonnes per year coal terminal at Balikpapan in East Kalimantan.
Tuesday, September 15, 2009
Indonesia's largest bank leads syndication credit to fertilizer company
JAKARTA-
Indonesia's largest bank, Bank Mandiri, was appointed to lead a syndication credit, worth 490 million U.S. dollars, for PT Pupuk Kalimatan Timur (Pupuk Kaltim),the country's biggest fertilizer manufacturer, local media detikcom reported on Monday.
The fund is aimed to refinance construction of Kaltim-5 project with capacity of 2,500 Metric Tons per Day (MTPD) of ammonia and 3,500 MTPD of urea in Bontang of West Kalimantan, Agus Martowardojo, the bank's president director, was quoted by the report as saying.
The total investment for the project is 700 million U.S. dollars, according to the report.
"The syndication credit is expected to be an important momentum to support government program of fertilizer company revitalization for the sake of the country's food resilience," said Agus here.
He said that local and foreign banks have expressed their intention to participate in the syndication.
There is an annual demand of 10 million tons of fertilizer in the country, however, the domestic companies can only produce 7 million tons a year.
The Pupuk Kaltim's president director Hidayat Nyakman said the project is one effort to increase Indonesia's fertilizer production capacity. The project will replace the aging and inefficient Kaltim -1.
Hidayat said that of the total investment of 700 million, his company expects 70 percent (490 million dollars) from banking finance and the rest (210 million dollars) from its internal fund.
Indonesia's largest bank, Bank Mandiri, was appointed to lead a syndication credit, worth 490 million U.S. dollars, for PT Pupuk Kalimatan Timur (Pupuk Kaltim),the country's biggest fertilizer manufacturer, local media detikcom reported on Monday.
The fund is aimed to refinance construction of Kaltim-5 project with capacity of 2,500 Metric Tons per Day (MTPD) of ammonia and 3,500 MTPD of urea in Bontang of West Kalimantan, Agus Martowardojo, the bank's president director, was quoted by the report as saying.
The total investment for the project is 700 million U.S. dollars, according to the report.
"The syndication credit is expected to be an important momentum to support government program of fertilizer company revitalization for the sake of the country's food resilience," said Agus here.
He said that local and foreign banks have expressed their intention to participate in the syndication.
There is an annual demand of 10 million tons of fertilizer in the country, however, the domestic companies can only produce 7 million tons a year.
The Pupuk Kaltim's president director Hidayat Nyakman said the project is one effort to increase Indonesia's fertilizer production capacity. The project will replace the aging and inefficient Kaltim -1.
Hidayat said that of the total investment of 700 million, his company expects 70 percent (490 million dollars) from banking finance and the rest (210 million dollars) from its internal fund.
Friday, September 11, 2009
Indonesia's Mandiri to open remittance unit in Malaysia
JAKARTA-
Indonesia's Bank Mandiri (BMRI.JK) will open a new unit in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.
Thomas Arifin, Director for International Banking, said the new unit would help Mandiri, Indonesia's biggest bank, increase its fee-based income.
"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Investor Daily.
In a press release on Friday, Bank Mandiri said the remittance unit in Malaysia would be set up by Mandiri International Remittance, the lender's subsidiary which is focused on developing remittance services.
Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.
However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.
Shares in Bank Mandiri were unchanged on Friday, while the broader market .JKSE was up 0.4 percent.
Indonesia's Bank Mandiri (BMRI.JK) will open a new unit in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.
Thomas Arifin, Director for International Banking, said the new unit would help Mandiri, Indonesia's biggest bank, increase its fee-based income.
"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Investor Daily.
In a press release on Friday, Bank Mandiri said the remittance unit in Malaysia would be set up by Mandiri International Remittance, the lender's subsidiary which is focused on developing remittance services.
Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.
However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.
Shares in Bank Mandiri were unchanged on Friday, while the broader market .JKSE was up 0.4 percent.
Wednesday, September 9, 2009
More than a year ago, Malaysia Today triggered the alarm bell by revealing that Maybank, a taxpayer-owned bank, was about to blow billions in a stupid deal. None of the politicians from Pakatan Rakyat took up the case though. Maybe they felt since it was Malaysia Today that revealed it then there was no need to panic. But NST and BT also reported the matter, although they tried to make it sound like a positive move. Now, everyone is trying to lock the stable door after the horse has bolted.
NO HOLDS BARRED
Raja Petra Kamarudin
Another RM2 billion loss?
By Hussein Hamid
http://blog.limkitsiang.com/, 9 September 2009
Tell me who would be stupid enough to go and buy a bank in Indonesia? You tell me who would do that? Then if that was not enough you go and take a running jump into Pakistan and buy another bank there. But wait there is more! While they are doing that why not pick up a bank in Vietnam. In all they spent an incredible RM10.8 billion to acquire these three banks. Who would be stupid enough to do this when Maybank has been advise AGAINST making the purchase? Maybank belongs to the Government and so they will take instructions from the Government.
Taking instructions from a Government run by idiots who thinks that Maybank is also Maybank. So in essence it is the Barisan Government that is stupid enough to go and buy three Banks in Indonesia, Pakistan and Vietnam for RM10.8 billion.
Now Malayan Banking has confirmed that it lost RM2 billion in this escapade. Now which UMNO guy made a few hundred million in commission from these purchases? Who are the usual suspects? Najib as the Minister of Finance has to be suspect number one – but if MACC does the questioning they will say that he is just ‘helping with inquires’. But Najib must beware that even helping with inquiries can be dangerous if Muhyiddin has anything to do about it.
Najib must have been advised by that Nor Mohamed Yaacob because he had experience of losing more billion when he was with Bank Negara – around RM30 billion in fact.
This latest escapades would have been hysterically funny if it had happened in one of those tin pot African country where you would need half the money in the Banks just to buy a loaf of bread. And of course as far as Najib is concern this is a ‘victimless crime’ because it does no physical harm to any person or property, or to which was in fact consented, and is currently illegal if based on statutory laws. As victimless as PKFZ and all those plundering of the nation resources. Well Najib I got news for you. The Rakyat now knows that in the end they pay !! That RM37.23 million Aidilfitri bonus for Felda – we all pay. That RN500 million for Razak Baginda – we pay. Soon you will be paying for this that you are now making the Rakyat pay…and then it will be Good Night for you.
*************************************************
Maybank wins bid for Indonesia's BII
By Adeline Paul Raj
New Straits Times, 27 March 2008
MALAYSIA'S biggest bank, Malayan Banking Bhd (Maybank), has won a bid to take control of Bank Internasional Indonesia (BII) for US$1.5 billion (about RM4.8 billion), a major step for the lender to expand in the region. BII is Indonesia's sixth largest bank in terms of assets, with over 230 branches.
"This acquisition will transform our growth prospects in Indonesia and significantly enhance our regional presence," Maybank acting chief executive officer Datuk Aminuddin Md Desa told reporters at a briefing yesterday in Kuala Lumpur.
To comply with takeover rules, Maybank will also offer to buy the remaining 44 per cent of BII, which could push its total bill to US$2.7 billion (RM8.6 billion). It plans to fund this internally. The deal comes just days after it agreed to buy a 15 per cent stake in Vietnam's An Binh Bank for RM430 million.
Maybank's bid for BII, at 4.6 times book value, appears steep, an indication of the stiff fight from bigger rivals and limited opportunities in the region. Analysts said that it was probably the most expensive bank purchase ever in Indonesia. Research firms like Citigroup had expected it to pay US$1.8 billion (RM5.7 billion) for all of BII.
Aminuddin, however, believes it is worth paying the hefty premium to get a controlling stake in a crucial market like Indonesia. The country has no foreign shareholding limits and offers one of the highest growth potential in the region. "It's an opportunity we couldn't afford to miss," he said.
A Reuters report said Maybank had beaten Bank of China for BII, after Europe's biggest lender, HSBC, dropped out in the last leg of the race. According to Aminuddin, BII will start contributing profits in the third year after the deal is completed. Maybank's strategy is to tap the remittance business and, later, trade finance. With BII, revenue contribution from Maybank's international operations will jump to 30 per cent in the next one or two years from about 19 per cent currently, he said.
In the first stage of the BII deal, which could take three months to complete, Maybank will pay RM4.8 billion to buy all of Sorak Financial Holdings Pte Ltd, which holds 56 per cent of BII. Sorak is owned by Singapore investment arm Temasek (75 per cent) and South Korea's Kookmin Bank (25 per cent). Maybank will then make a RM3.8 billion offer to buy out BII's minority shareholders.
On whether Maybank intends to take BII private, Aminuddin said it was still too early to say as it would depend on how minority shareholders respond to the offer. He pointed out, however, that Indonesian law states that as long as there are at least 3,000 public shareholders, a company can be kept listed no matter what the public shareholding spread is. Maybank, whose shares traded at RM8.95 yesterday before being suspended for the announcement, expects to complete the entire deal in six months. Temasek is selling its stake in BII to comply with Indonesian laws that forbid a foreign investor from owning more than one bank.
*************************************************
Temasek comes full circle with BII stake
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
Business Times, 11 August 2008
Temasek Holdings’ trouble-plagued bid to sell a stake in Indonesia's PT Bank Internasional Indonesia to Malaysia's Maybank holds a significance beyond the deal itself. More than just a transaction gone awry, it also reflects the changing realities facing the Singapore investment company.
The story of BII in Temasek's portfolio, in fact, says a lot about the shifts in its investment history over the last few years.
It will not be too much of an exaggeration to say that the road to Barclays and Merrill Lynch started with two Indonesian banks in the early 2000s. BII was one of the first major overseas investments by Temasek. Back in 2003, Temasek led a consortium called Sorak Financial Holdings, which also included Kookmin Bank, Barclays and Swiss-based ICB Financial Group Holdings, to clinch ownership of BII after reaching an agreement with the Indonesian Bank Restructuring Agency (Ibra).
Sorak paid 1.9 trillion rupiah (S$380 million at the time) for a 51 per cent stake in BII. The BII acquisition came just after Temasek and Deutsche Bank acquired a 62 per cent stake in another Indonesian lender, Bank Danamon, earlier that year.
Until then, Temasek's major investments had been mostly Singapore-centric. So BII, together with Danamon, marked the start of Temasek's overseas investments, as well as the beginning of its investments in foreign banks. Some questioned the acquisitions at the time, while others saw a political motive (buying the two banks, which were distressed entities restructured for sale by Ibra, was seen as contributing to Indonesia's recovery from the Asian crisis).
But there was also a clear commercial imperative: It was a genuine opportunity to buy financial assets at attractive valuations with the potential for strong returns — a theme that would run through to the present time.
Temasek went on to buy over Barclays and ICB's stakes in BII, and is estimated to have invested at least S$455 million in all in the bank.
Then came one of the regulatory shifts that have become all too familiar to Temasek. New foreign ownership rules under the Indonesian central bank's single presence policy, which takes effect by the end of 2010, meant that Temasek had to reduce its Indonesian bank portfolio by half.
Until late last year, the preferred option seemed to be a merger of BII and Danamon to meet the new rules. BII went as far as to say that it was drafting a proposal to merge with Danamon. The two banks complemented each other, said BII president-director Henry Ho.
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
What led to the change of heart? First, it could be reflective of Temasek's growing caution, even disappointment, over the Indonesian market. The regulatory shifts and flip-flops in Indonesia, including that involving Temasek's telco investment
Indosat, suggested that reducing its Indonesian exposure might be a prudent option.
At the same time, while the financial sector in Indonesia appeared healthy, critics have charged that it was vulnerable to a sudden reversal of fortunes because of the inflow of hot money into the stock market and the spike, until recently, in international commodity prices.
The second factor might hold some irony. If the path to Barclays and Merrill had started with BII and Danamon, then the decision to sell BII could also be traced to Temasek's push west-wards. Temasek's investments in Barclays and Merrill, beginning last year, signified a new global thrust beyond regional acquisitions.
That meant realigning the portfolio, and raising funds for new investments by disposing of existing assets. There could be one more reason at play: the billions pumped into Barclays and Merrill, while undeniably long-term in nature, are currently sitting on huge paper losses. It would be nice to book a profit somewhere, and the sale of the BII stake to Maybank would have yielded a useful S$1 billion, according to some estimates.
Of course, in the neighbourhood scheme of things, Malaysian central bank Bank Negara put the brakes on the deal last month. Apparently, it was worried that Maybank could suffer losses from overpaying (not unreasonable, given that the price is 4.7 times over book) for BII. It is still unclear how things would pan out, but as it is, it is a setback for Temasek.
It is now forced to revisit its options for BII, including merging it with Danamon. And if Temasek continues to put the BII stake up for sale, it is unlikely to fetch a price as high as the one Maybank was willing to pay, given the circumstances.
Another lesson in the realities of investing in the region then. No wonder even ailing US and European banks look so attractive.
*************************************************
Najib: Deal good for Maybank
New Straits Times, October 2008
Maybank's decision to acquire a controlling stake in PT Bank Internasional Indonesia (BII) was made before the global economic downturn, Datuk Seri Najib Razak said.
Therefore, he said, it was too late for Maybank to back out of the acquisition.
Asked if the move was a good idea considering the current state of the global economy, the deputy prime minister and finance minister said the decision was a commercial one which was up to Maybank to decide on without government intervention.
Najib, however, insisted that the move was still a good one for the country.
"It (Maybank) will own the fifth largest Indonesian bank and become a regional bank," he said at the cabinet's open house at the Putra World Trade Centre on Wednesday.
Maybank shelled out RM4.26 billion for a 55.6 per cent stake in BII on Tuesday.
It was given a RM759 million rebate after the original price was deemed too high given the current economic scenario.
The initial price was more than four times the book value of the bank, resulting in several parties demanding that a new deal, at two to three times the book value, be hammered out.
Maybank stood to forfeit its RM480 million deposit from the original tender if it pulled out of the deal.
NO HOLDS BARRED
Raja Petra Kamarudin
Another RM2 billion loss?
By Hussein Hamid
http://blog.limkitsiang.com/, 9 September 2009
Tell me who would be stupid enough to go and buy a bank in Indonesia? You tell me who would do that? Then if that was not enough you go and take a running jump into Pakistan and buy another bank there. But wait there is more! While they are doing that why not pick up a bank in Vietnam. In all they spent an incredible RM10.8 billion to acquire these three banks. Who would be stupid enough to do this when Maybank has been advise AGAINST making the purchase? Maybank belongs to the Government and so they will take instructions from the Government.
Taking instructions from a Government run by idiots who thinks that Maybank is also Maybank. So in essence it is the Barisan Government that is stupid enough to go and buy three Banks in Indonesia, Pakistan and Vietnam for RM10.8 billion.
Now Malayan Banking has confirmed that it lost RM2 billion in this escapade. Now which UMNO guy made a few hundred million in commission from these purchases? Who are the usual suspects? Najib as the Minister of Finance has to be suspect number one – but if MACC does the questioning they will say that he is just ‘helping with inquires’. But Najib must beware that even helping with inquiries can be dangerous if Muhyiddin has anything to do about it.
Najib must have been advised by that Nor Mohamed Yaacob because he had experience of losing more billion when he was with Bank Negara – around RM30 billion in fact.
This latest escapades would have been hysterically funny if it had happened in one of those tin pot African country where you would need half the money in the Banks just to buy a loaf of bread. And of course as far as Najib is concern this is a ‘victimless crime’ because it does no physical harm to any person or property, or to which was in fact consented, and is currently illegal if based on statutory laws. As victimless as PKFZ and all those plundering of the nation resources. Well Najib I got news for you. The Rakyat now knows that in the end they pay !! That RM37.23 million Aidilfitri bonus for Felda – we all pay. That RN500 million for Razak Baginda – we pay. Soon you will be paying for this that you are now making the Rakyat pay…and then it will be Good Night for you.
*************************************************
Maybank wins bid for Indonesia's BII
By Adeline Paul Raj
New Straits Times, 27 March 2008
MALAYSIA'S biggest bank, Malayan Banking Bhd (Maybank), has won a bid to take control of Bank Internasional Indonesia (BII) for US$1.5 billion (about RM4.8 billion), a major step for the lender to expand in the region. BII is Indonesia's sixth largest bank in terms of assets, with over 230 branches.
"This acquisition will transform our growth prospects in Indonesia and significantly enhance our regional presence," Maybank acting chief executive officer Datuk Aminuddin Md Desa told reporters at a briefing yesterday in Kuala Lumpur.
To comply with takeover rules, Maybank will also offer to buy the remaining 44 per cent of BII, which could push its total bill to US$2.7 billion (RM8.6 billion). It plans to fund this internally. The deal comes just days after it agreed to buy a 15 per cent stake in Vietnam's An Binh Bank for RM430 million.
Maybank's bid for BII, at 4.6 times book value, appears steep, an indication of the stiff fight from bigger rivals and limited opportunities in the region. Analysts said that it was probably the most expensive bank purchase ever in Indonesia. Research firms like Citigroup had expected it to pay US$1.8 billion (RM5.7 billion) for all of BII.
Aminuddin, however, believes it is worth paying the hefty premium to get a controlling stake in a crucial market like Indonesia. The country has no foreign shareholding limits and offers one of the highest growth potential in the region. "It's an opportunity we couldn't afford to miss," he said.
A Reuters report said Maybank had beaten Bank of China for BII, after Europe's biggest lender, HSBC, dropped out in the last leg of the race. According to Aminuddin, BII will start contributing profits in the third year after the deal is completed. Maybank's strategy is to tap the remittance business and, later, trade finance. With BII, revenue contribution from Maybank's international operations will jump to 30 per cent in the next one or two years from about 19 per cent currently, he said.
In the first stage of the BII deal, which could take three months to complete, Maybank will pay RM4.8 billion to buy all of Sorak Financial Holdings Pte Ltd, which holds 56 per cent of BII. Sorak is owned by Singapore investment arm Temasek (75 per cent) and South Korea's Kookmin Bank (25 per cent). Maybank will then make a RM3.8 billion offer to buy out BII's minority shareholders.
On whether Maybank intends to take BII private, Aminuddin said it was still too early to say as it would depend on how minority shareholders respond to the offer. He pointed out, however, that Indonesian law states that as long as there are at least 3,000 public shareholders, a company can be kept listed no matter what the public shareholding spread is. Maybank, whose shares traded at RM8.95 yesterday before being suspended for the announcement, expects to complete the entire deal in six months. Temasek is selling its stake in BII to comply with Indonesian laws that forbid a foreign investor from owning more than one bank.
*************************************************
Temasek comes full circle with BII stake
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
Business Times, 11 August 2008
Temasek Holdings’ trouble-plagued bid to sell a stake in Indonesia's PT Bank Internasional Indonesia to Malaysia's Maybank holds a significance beyond the deal itself. More than just a transaction gone awry, it also reflects the changing realities facing the Singapore investment company.
The story of BII in Temasek's portfolio, in fact, says a lot about the shifts in its investment history over the last few years.
It will not be too much of an exaggeration to say that the road to Barclays and Merrill Lynch started with two Indonesian banks in the early 2000s. BII was one of the first major overseas investments by Temasek. Back in 2003, Temasek led a consortium called Sorak Financial Holdings, which also included Kookmin Bank, Barclays and Swiss-based ICB Financial Group Holdings, to clinch ownership of BII after reaching an agreement with the Indonesian Bank Restructuring Agency (Ibra).
Sorak paid 1.9 trillion rupiah (S$380 million at the time) for a 51 per cent stake in BII. The BII acquisition came just after Temasek and Deutsche Bank acquired a 62 per cent stake in another Indonesian lender, Bank Danamon, earlier that year.
Until then, Temasek's major investments had been mostly Singapore-centric. So BII, together with Danamon, marked the start of Temasek's overseas investments, as well as the beginning of its investments in foreign banks. Some questioned the acquisitions at the time, while others saw a political motive (buying the two banks, which were distressed entities restructured for sale by Ibra, was seen as contributing to Indonesia's recovery from the Asian crisis).
But there was also a clear commercial imperative: It was a genuine opportunity to buy financial assets at attractive valuations with the potential for strong returns — a theme that would run through to the present time.
Temasek went on to buy over Barclays and ICB's stakes in BII, and is estimated to have invested at least S$455 million in all in the bank.
Then came one of the regulatory shifts that have become all too familiar to Temasek. New foreign ownership rules under the Indonesian central bank's single presence policy, which takes effect by the end of 2010, meant that Temasek had to reduce its Indonesian bank portfolio by half.
Until late last year, the preferred option seemed to be a merger of BII and Danamon to meet the new rules. BII went as far as to say that it was drafting a proposal to merge with Danamon. The two banks complemented each other, said BII president-director Henry Ho.
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
What led to the change of heart? First, it could be reflective of Temasek's growing caution, even disappointment, over the Indonesian market. The regulatory shifts and flip-flops in Indonesia, including that involving Temasek's telco investment
Indosat, suggested that reducing its Indonesian exposure might be a prudent option.
At the same time, while the financial sector in Indonesia appeared healthy, critics have charged that it was vulnerable to a sudden reversal of fortunes because of the inflow of hot money into the stock market and the spike, until recently, in international commodity prices.
The second factor might hold some irony. If the path to Barclays and Merrill had started with BII and Danamon, then the decision to sell BII could also be traced to Temasek's push west-wards. Temasek's investments in Barclays and Merrill, beginning last year, signified a new global thrust beyond regional acquisitions.
That meant realigning the portfolio, and raising funds for new investments by disposing of existing assets. There could be one more reason at play: the billions pumped into Barclays and Merrill, while undeniably long-term in nature, are currently sitting on huge paper losses. It would be nice to book a profit somewhere, and the sale of the BII stake to Maybank would have yielded a useful S$1 billion, according to some estimates.
Of course, in the neighbourhood scheme of things, Malaysian central bank Bank Negara put the brakes on the deal last month. Apparently, it was worried that Maybank could suffer losses from overpaying (not unreasonable, given that the price is 4.7 times over book) for BII. It is still unclear how things would pan out, but as it is, it is a setback for Temasek.
It is now forced to revisit its options for BII, including merging it with Danamon. And if Temasek continues to put the BII stake up for sale, it is unlikely to fetch a price as high as the one Maybank was willing to pay, given the circumstances.
Another lesson in the realities of investing in the region then. No wonder even ailing US and European banks look so attractive.
*************************************************
Najib: Deal good for Maybank
New Straits Times, October 2008
Maybank's decision to acquire a controlling stake in PT Bank Internasional Indonesia (BII) was made before the global economic downturn, Datuk Seri Najib Razak said.
Therefore, he said, it was too late for Maybank to back out of the acquisition.
Asked if the move was a good idea considering the current state of the global economy, the deputy prime minister and finance minister said the decision was a commercial one which was up to Maybank to decide on without government intervention.
Najib, however, insisted that the move was still a good one for the country.
"It (Maybank) will own the fifth largest Indonesian bank and become a regional bank," he said at the cabinet's open house at the Putra World Trade Centre on Wednesday.
Maybank shelled out RM4.26 billion for a 55.6 per cent stake in BII on Tuesday.
It was given a RM759 million rebate after the original price was deemed too high given the current economic scenario.
The initial price was more than four times the book value of the bank, resulting in several parties demanding that a new deal, at two to three times the book value, be hammered out.
Maybank stood to forfeit its RM480 million deposit from the original tender if it pulled out of the deal.
Friday, September 4, 2009
Maybank, CIMB in big fight in Indonesia
THE stage is set and the fight begins at two levels for CIMB group and Malayan Banking Bhd (Maybank) to slug it out in Indonesia – between themselves as the two largest Malaysian banking groups – and among the formidable banking giants in Indonesia.
Between the two, it looks like CIMB has a seven-year headstart, having bought Bank Niaga at a time when many were afraid to touch Indonesian assets and at a much cheaper price of 1.5 times book value compared with Maybank’s acquisition of Bank Internasional Indonesia (BII) at 4.6 times.
While Maybank was busy settling external and internal issues related to the Indonesian government’s regulations and huge impairment charges at BII, CIMB was building its fort in Indonesia by merging Bank Niaga with Bank Lippo. That brings CIMB Niaga’s branch network in Indonesia to 654 which definitely overshadows BII’s 250 at the moment.
On an individual bank level, CIMB Niaga, the fifth largest bank in terms of asset size, and BII, which is eighth largest, will have to contend with the other banking giants in Indonesia.
CIMB’s overseas (mostly from Indonesia) pre-tax profit contribution at 22% is, of course, a source of excitement within the group. It is something that Maybank, which is already very successful in its core commercial banking operations, is eyeing with “green eyes.’’
For the second quarter ended June 30, the enlarged CIMB Niaga’s pre-tax contribution surged 82.8% to RM371mil from RM203mil. When it comes to business and competition, those that respond to new challenges can emerge winners and those that appear to be the current winners can suddenly find themselves out of the race, if they are not vigilant.
For many back home, it will be a keenly watched competition between the two Malaysian banking groups in Indonesia especially now that Maybank has made known its decision to take a one-time hit of RM1.7bil in impairment and higher loan loss provisions at BII.
With a new team in place, BII appears resolute and confident that it can make some money at the operating level by year-end although it will take three to five years to be earnings accretive.
The anticipation (and pressure) is very obvious among Maybank executives when they speak of BII. “Our first priority was to address the motorcycle financing problems,’’ said Maybank president and CEO Datuk Seri Abdul Wahid at last week’s results briefing. “That has turned around with good operating numbers. We will proceed to improve consumer, small and medium-scale enterprises and corporate banking at BII.’’
The initial expectations of BII are not high but as the momentum builds up, Maybank hopes to at least obtain a return on investment that is equivalent to the cost of debt (taken to fund the acquisition) at about 6%, which comes up to about RM474mil.
The competition between CIMB and Maybank in Indonesia will become more intense should Maybank double its number of branches at BII, by which time, CIMB would have done something else to fortify its position.
At the moment, CIMB seems pretty confident that it has the scale; something that is required in the Indonesian banking sector, while their strategists would probably be trying to figure how fast Maybank would take to carry out its BII expansion.
CIMB chief financial officer Kenny Kim recently told StarBiz that CIMB Niaga was dominant in the capital market franchise, with Niaga’s strength in retail and corporate banking and Lippo’s leadership in transactional banking. Overall, the message is to build leadership in key market segments.
All said, one should not forget that Maybank has other substantial foreign operations such as in Singapore while CIMB is about to implement a transformation programme for its Thai business.
By Yap Leng Kuen
● Senior business editor Yap Leng Kuen’s view is that reach through a strong branch presence is important but equally vital are internal strategies to extract value. Many would be watching if BII can deliver its numbers and show that it is able to earn more from a smaller physical branch network than CIMB Niaga.
Between the two, it looks like CIMB has a seven-year headstart, having bought Bank Niaga at a time when many were afraid to touch Indonesian assets and at a much cheaper price of 1.5 times book value compared with Maybank’s acquisition of Bank Internasional Indonesia (BII) at 4.6 times.
While Maybank was busy settling external and internal issues related to the Indonesian government’s regulations and huge impairment charges at BII, CIMB was building its fort in Indonesia by merging Bank Niaga with Bank Lippo. That brings CIMB Niaga’s branch network in Indonesia to 654 which definitely overshadows BII’s 250 at the moment.
On an individual bank level, CIMB Niaga, the fifth largest bank in terms of asset size, and BII, which is eighth largest, will have to contend with the other banking giants in Indonesia.
CIMB’s overseas (mostly from Indonesia) pre-tax profit contribution at 22% is, of course, a source of excitement within the group. It is something that Maybank, which is already very successful in its core commercial banking operations, is eyeing with “green eyes.’’
For the second quarter ended June 30, the enlarged CIMB Niaga’s pre-tax contribution surged 82.8% to RM371mil from RM203mil. When it comes to business and competition, those that respond to new challenges can emerge winners and those that appear to be the current winners can suddenly find themselves out of the race, if they are not vigilant.
For many back home, it will be a keenly watched competition between the two Malaysian banking groups in Indonesia especially now that Maybank has made known its decision to take a one-time hit of RM1.7bil in impairment and higher loan loss provisions at BII.
With a new team in place, BII appears resolute and confident that it can make some money at the operating level by year-end although it will take three to five years to be earnings accretive.
The anticipation (and pressure) is very obvious among Maybank executives when they speak of BII. “Our first priority was to address the motorcycle financing problems,’’ said Maybank president and CEO Datuk Seri Abdul Wahid at last week’s results briefing. “That has turned around with good operating numbers. We will proceed to improve consumer, small and medium-scale enterprises and corporate banking at BII.’’
The initial expectations of BII are not high but as the momentum builds up, Maybank hopes to at least obtain a return on investment that is equivalent to the cost of debt (taken to fund the acquisition) at about 6%, which comes up to about RM474mil.
The competition between CIMB and Maybank in Indonesia will become more intense should Maybank double its number of branches at BII, by which time, CIMB would have done something else to fortify its position.
At the moment, CIMB seems pretty confident that it has the scale; something that is required in the Indonesian banking sector, while their strategists would probably be trying to figure how fast Maybank would take to carry out its BII expansion.
CIMB chief financial officer Kenny Kim recently told StarBiz that CIMB Niaga was dominant in the capital market franchise, with Niaga’s strength in retail and corporate banking and Lippo’s leadership in transactional banking. Overall, the message is to build leadership in key market segments.
All said, one should not forget that Maybank has other substantial foreign operations such as in Singapore while CIMB is about to implement a transformation programme for its Thai business.
By Yap Leng Kuen
● Senior business editor Yap Leng Kuen’s view is that reach through a strong branch presence is important but equally vital are internal strategies to extract value. Many would be watching if BII can deliver its numbers and show that it is able to earn more from a smaller physical branch network than CIMB Niaga.
Wednesday, August 26, 2009
Indonesia's Bank Mandiri eyes subordinated debt issue
JAKARTA -
Indonesia's biggest lender PT Bank Mandiri Tbk (BMRI.JK) plans to raise 3 trillion rupiah ($300 million) or more from a subordinated bond issue for further expansion, the bank's president director said late on Tuesday.
President Director Agus Martowardojo told reporters that the debt offering would take place by the end of the year.
"We estimate the value to be around 3 trillion rupiah or more. We are watching the market response for possible dollar (denominated) bonds or rupiah, at this point the rupiah is likely to be more feasible," he said.
Mandiri, which has a stock market value of $8.67 billion, posted a 24.4 percent increase in net profit to 1.5 trillion rupiah in the second quarter, based on Reuters calculations.
The lender forecast loan growth of 15-18 percent in 2009, higher than the central bank's forecast of 11-12 percent.
Mandiri will select advisors for the issue from seven investment banks and securities firms already approached, but Martowardojo declined to say how many advisors would be appointed. ($1 = 9,995 rupiah)
Indonesia's biggest lender PT Bank Mandiri Tbk (BMRI.JK) plans to raise 3 trillion rupiah ($300 million) or more from a subordinated bond issue for further expansion, the bank's president director said late on Tuesday.
President Director Agus Martowardojo told reporters that the debt offering would take place by the end of the year.
"We estimate the value to be around 3 trillion rupiah or more. We are watching the market response for possible dollar (denominated) bonds or rupiah, at this point the rupiah is likely to be more feasible," he said.
Mandiri, which has a stock market value of $8.67 billion, posted a 24.4 percent increase in net profit to 1.5 trillion rupiah in the second quarter, based on Reuters calculations.
The lender forecast loan growth of 15-18 percent in 2009, higher than the central bank's forecast of 11-12 percent.
Mandiri will select advisors for the issue from seven investment banks and securities firms already approached, but Martowardojo declined to say how many advisors would be appointed. ($1 = 9,995 rupiah)
Tuesday, August 25, 2009
BANK MANDIRI LED SYNDICATE TO PROVIDE TELKOM US$555 MLN LOAN
JAKARTA-
Indonesia's largest lender in asset Bank Mandiri (JSX:BMRI) is leading a bank syndicate to provide a Rp5.55 trillion (US$555 million) loan for state telecommunication company PT Telkom (JSX:TLKM).
Other members of the syndicate are PT Bank Central Asia (BCA) (JSX:BBCA), PT Bank Negara Indonesia (BNI) (JSX:BBNI) and PT Bank Rakyat Indonesia (BRI) (JSX:BBRI).
BCA and Bank Mandiri will provide the largest part of Rp2 trillion each with BRI and BNI to contribute Rp800 billion and Rp750 billion respectively, the newspaper Investor Daily said.
Banking sources told the paper an agreement will be signed soon, but an official of Bank Mandiri refused to confirm.
PT Telkom will use the fund as part of its capital spending of Rp15 trillion set for this year, the source added.
Indonesia's largest lender in asset Bank Mandiri (JSX:BMRI) is leading a bank syndicate to provide a Rp5.55 trillion (US$555 million) loan for state telecommunication company PT Telkom (JSX:TLKM).
Other members of the syndicate are PT Bank Central Asia (BCA) (JSX:BBCA), PT Bank Negara Indonesia (BNI) (JSX:BBNI) and PT Bank Rakyat Indonesia (BRI) (JSX:BBRI).
BCA and Bank Mandiri will provide the largest part of Rp2 trillion each with BRI and BNI to contribute Rp800 billion and Rp750 billion respectively, the newspaper Investor Daily said.
Banking sources told the paper an agreement will be signed soon, but an official of Bank Mandiri refused to confirm.
PT Telkom will use the fund as part of its capital spending of Rp15 trillion set for this year, the source added.
Friday, August 21, 2009
EAST JAVA BRANCH OF BRI SET TO CHALK UP US$200 MLN IN NET PROFIT
JAKARTA - The East Java branch of Bank Rakyat Indonesia (BRI) has decided to increase its net profit target to Rp2 trillion (US$200 million) on this year.
The target is increased from Rp1.7 trillion set earlier or the same as its profit in 2008, on growing demands for credit, Heru Sukanto, head of the branch office of the state bank, said.
The optimism is based on the performance of the bank branch, which recorded Rp904 billion in net profit in the first half of the year, he told the newspaper Investor Daily.
Heru said demands for credits especially from small and medium enterprises grew after the recent commissioning of the country's longest bridge spanning the sea between Surabaya and the island of Madura. Aug 20, 2009
The target is increased from Rp1.7 trillion set earlier or the same as its profit in 2008, on growing demands for credit, Heru Sukanto, head of the branch office of the state bank, said.
The optimism is based on the performance of the bank branch, which recorded Rp904 billion in net profit in the first half of the year, he told the newspaper Investor Daily.
Heru said demands for credits especially from small and medium enterprises grew after the recent commissioning of the country's longest bridge spanning the sea between Surabaya and the island of Madura. Aug 20, 2009
15 Banks Cut Interest Rates
The agreement was reached during a meeting facilitated by Bank Indonesia today.
15 top Indonesian banks agreed to reduce the interest rate of third-party fund as an adjustment to the central bank benchmark interest rate.
The agreement was reached during a meeting facilitated by Bank Indonesia on Thursday, August 20.
"The adjustment is expected to be concluded in three months," said Head of the Indonesian Banker Association Agus Martowardojo.
Earlier, Senior Deputy Governor of Bank Indonesia Darmin Nasution said Bank Indonesia (BI) must prepare immediate measures if the common processes and mechanisms do not apply. This is in line with the slow cut in banks' interest rates.
BI will team up with Finance Minister and State-owned enterprises to discuss about the response in interest rate cut.
He said there are indeed various proposals to regulate fixed deposit interest rate. However, BI has yet to implement its authority.
Wednesday, August 12, 2009
Maybank Board Revamp A Normal Transition, Says CEO
KUALA LUMPUR-
Malayan Banking Bhd (Maybank)'s board revamp is part of a normal transition, its chief executive officer Datuk Seri Abdul Wahid Omar said Monday.
"It is a normal course of transition," he said when asked to comment on a Singapore's Straits Times report which stated that the revamp was directed by Bank Negara Malaysia which was not happy with the high price that Maybank paid for the acquisition of Bank Internasional Indonesia (BII).
Maybank will give further details during the announcement of its financial year results on August 25, he told reporters on the sidelines of the World Capital Markets Symposium here.
The report quoted a senior government official who was involved in top-level discussions on Maybank's Indonesian venture as saying that the little-publicised revamp followed government displeasure at the controversial acquisition by Maybank last year.
The official said that the board revamp will be carried out in stages and directors who are retiring will not be re-elected to the board.
Maybank entered into an agreement to buy a 55 percent interest in BII from Sorak Financial Holdings in March 2008, which was majority-owned by Singapore's Temasek Holdings.
It agreed to pay US$1.5 billion (RM5.3 billion) for the stake and then made a tender offer for the remaining 44 percent for roughly US$1.2 billion.
Minority Shareholder Watchdog Group's chief executive officer Rita Benoy Bushon, when met during the symposium, said it was a normal process if the central bank asked to revamp the board of directors.
"However, the decision on Maybank is quite abnormal and sudden. It is surprising," she said, adding that the watchdog group would study the issue.
Maybank's main shareholders are national equity fund Permodalan Nasional Berhad and pension fund Employees Provident Fund.
Maybank sent a statement providing reasons for its board of directors' revamp on July 15 when announcing the retirement of two directors and the appointment of three new members.
In explaining the changes, Maybank then said the appointments represented a significant development in the ongoing transition and succession planning exercise implemented by the board following an initiative formulated in 2007.
"In the interest of the organisation, the execution of the transition and succession planning exercise also takes cognizance of the need to maintain elements of continuity in the composition, proceedings and stability of the board," it said.
"The board's transition and succession planning exercise is designed in line with international best practices on board governance and effectiveness," it added.
Between end-October last year, when the acquisition of BII was completed, and March this year, three of its directors have resigned.
Source BERNAMA, Aug 11
Malayan Banking Bhd (Maybank)'s board revamp is part of a normal transition, its chief executive officer Datuk Seri Abdul Wahid Omar said Monday.
"It is a normal course of transition," he said when asked to comment on a Singapore's Straits Times report which stated that the revamp was directed by Bank Negara Malaysia which was not happy with the high price that Maybank paid for the acquisition of Bank Internasional Indonesia (BII).
Maybank will give further details during the announcement of its financial year results on August 25, he told reporters on the sidelines of the World Capital Markets Symposium here.
The report quoted a senior government official who was involved in top-level discussions on Maybank's Indonesian venture as saying that the little-publicised revamp followed government displeasure at the controversial acquisition by Maybank last year.
The official said that the board revamp will be carried out in stages and directors who are retiring will not be re-elected to the board.
Maybank entered into an agreement to buy a 55 percent interest in BII from Sorak Financial Holdings in March 2008, which was majority-owned by Singapore's Temasek Holdings.
It agreed to pay US$1.5 billion (RM5.3 billion) for the stake and then made a tender offer for the remaining 44 percent for roughly US$1.2 billion.
Minority Shareholder Watchdog Group's chief executive officer Rita Benoy Bushon, when met during the symposium, said it was a normal process if the central bank asked to revamp the board of directors.
"However, the decision on Maybank is quite abnormal and sudden. It is surprising," she said, adding that the watchdog group would study the issue.
Maybank's main shareholders are national equity fund Permodalan Nasional Berhad and pension fund Employees Provident Fund.
Maybank sent a statement providing reasons for its board of directors' revamp on July 15 when announcing the retirement of two directors and the appointment of three new members.
In explaining the changes, Maybank then said the appointments represented a significant development in the ongoing transition and succession planning exercise implemented by the board following an initiative formulated in 2007.
"In the interest of the organisation, the execution of the transition and succession planning exercise also takes cognizance of the need to maintain elements of continuity in the composition, proceedings and stability of the board," it said.
"The board's transition and succession planning exercise is designed in line with international best practices on board governance and effectiveness," it added.
Between end-October last year, when the acquisition of BII was completed, and March this year, three of its directors have resigned.
Source BERNAMA, Aug 11
HSBC says lifts stake in Indonesia bank to 98.96 pct
HONG KONG -
HSBC Holdings (HSBA.L) (0005.HK) said it had completed a mandatory tender offer and bought an additional 10.08 percent stake in PT Bank Ekonomi Raharja Tbk (BAEK.JK), raising its stake in the Indonesia bank to 98.96 percent.
HSBC said on Wednesday that it had bought 269.01 million shares of the Indonesia bank held by the general public for 713.4 billion rupiah ($71.98 million).
"The acquisition almost doubled HSBC's presence to 208 outlets in 26 cities in the world's fourth most populous country," HSBC said in the statement.
HSBC had in May set a tender offer price of 2,652 rupiah (US$0.258) per share for the remaining shares in Indonesia's Bank Ekonomi Raharja Tbk (BAEK.JK). From Reuters, Aug 12.
HSBC Holdings (HSBA.L) (0005.HK) said it had completed a mandatory tender offer and bought an additional 10.08 percent stake in PT Bank Ekonomi Raharja Tbk (BAEK.JK), raising its stake in the Indonesia bank to 98.96 percent.
HSBC said on Wednesday that it had bought 269.01 million shares of the Indonesia bank held by the general public for 713.4 billion rupiah ($71.98 million).
"The acquisition almost doubled HSBC's presence to 208 outlets in 26 cities in the world's fourth most populous country," HSBC said in the statement.
HSBC had in May set a tender offer price of 2,652 rupiah (US$0.258) per share for the remaining shares in Indonesia's Bank Ekonomi Raharja Tbk (BAEK.JK). From Reuters, Aug 12.
Monday, August 10, 2009
The road ahead for Maybank
Saturday August 8, 2009
By JAGDEV SINGH SIDHU
Its push for regionalisation will continue as other players seek opportunities in the region as well.
The changing landscape of banking has brought about many opportunities for banks in the country and it is no different for Malayan Banking Bhd, the largest bank in the country.
Maybank, like many others, is set on growing its staple businesses and is fleshing out the segments in which it is weak. But what excites the bank the most has been the source of much of its recent criticism.
Regionalisation, which had come at a great cost to Maybank, is seen as a segment of business that excites the upper echelon of management. The prospect of tagging on high-growth markets to the more placid growth markets in Malaysia is seen as the ideal tonic for the bank.
“For the banking entity, the push for regionalisation will continue and others will be looking for opportunities in the region as well,’’ says Maybank president and CEO Datuk Seri Abdul Wahid Omar.
Maybank spent RM11.1bil acquiring three banks just before the financial crisis engulfed much of the world.
The resulting recession seen in much of the developed world dragged down growth rates and dampened prospects throughout the world.
For Maybank, it had an added task of managing a transition of ownership, particularly in the next crown jewel of its overseas operations – Bank Internasional Indonesia (BII).
“As far as BII is concerned, because of the transition, it has not fully grown for the moment. And we want to make sure we put in place the necessary infrastructure before we push for growth. Our asset size has been relatively flat over the past one year,’’ he says. “We will start to expand a bit more aggressively from September.”
The under-banked market in Indonesia – where the banking penetration is just 33% to gross domestic product (GDP) – offers tremendous medium to long-term prospects to Maybank.
The market in Indonesia is also a fertile ground for Maybank to start cultivating its Islamic finance business as that business makes up just 5% of the market there.
The excitement also extends to Malaysia where Wahid says Islamic banking makes up 17% of total assets but the growth is twice as fast as conventional banking.
“As you cross the 20% to 25% range and reach a third, then you will see critical mass and with that innovation will come,’’ he says.
Wahid says the Islamic capital market is also interesting although it has been affected by the economic environment and the availability of conventional funding at very low rates.
“But as the economy recovers, capital-market activity will return such as sukuks and various other structures coming into place,’’ he says. “We also have takaful under Etiqa and some wealth management under Maybank Islamic. Eventually we are looking to consolidate everything under one entity, and that is Maybank Islamic.’’
Another exciting business segment for Wahid is Internet banking.
Maybank currently has the largest number of customers who do banking online through its Internet banking channel – 3.3 million out of a customer base of eight million – and he expects them to conduct more diverse transactions in the future.
“Currently, a lot of them are doing basic transactions but we are beginning to see other types of transactions such as the purchase of other products and money transfers,’’ he says. “Even though the penetration on mobile is not there yet, it is something we see happening in the next five years.’’
Domestically, Wahid feels Maybank could do more in investment banking and stockbroking.
“Although in debt capital markets we are ranked second, in the equity capital markets we are probably number three or four,’’ he says, adding that he wants to close the gap with the leaders.
Maybank, he says, has spent the downtime in investment banking this year on beefing up skills and resources so as to capitalise when the markets pick up next year.
In stockbroking, Wahid says Maybank is ranked seventh or eighth and that more needs to be done to tap the group’s vast branch network to grow that business.
“Once we get the infrastructure improved and strengthen our management on the broking side, and coupled with Internet banking and broking, we can make good advancement,’’ he says.
On asset management, Wahid says Maybank has made a conscious decision to park its asset management business under its insurance business so that the group can have a sizeable amount of funds under management.
“With that we can look at RM20bil of assets under management and from there we can strengthen our capabilities before going out and managing third-party clients,’’ he says, adding that the group is at least a couple of years away from managing a substantial amount of business for third-party clients.
“We also need to rebuild our unit trust management,’’ he says.
StarBizWeek: Has the crisis opened an avenue for Maybank?
Wahid: It has, from the corporate banking perspective. The large foreign players have slowed down and allowed us to gain dominance and prominence in that market. It has also helped us in terms of pricing.
Until recently it was so competitive, and many corporates were enjoying 50-basis-point spread over the cost of funds. But now the pricing is better and these people are paying close to 100 basis points.
What are the problem areas?
In terms of non-performing loans (NPLs), they are manageable. The net NPL ratio continues to decline. At end-March, it was 1.76% compared with the industry’s 2.2%.
We expect the number to have improved further after June.
There are concerns there could be a delayed effect, in the second half of the year, from customers who are suffering and who have run out of cash and no longer enjoy the indulgence from banks. So far, we think it is manageable.
The good news is that the economy has seen its bottom in the first quarter. We should be seeing improvement in the second quarter. From minus 7.7%, we should be seeing upwards of 2% on a quarter-on-quarter basis.
As the head of the Association of Banks, what is your view on the state of the banking industry?
Malaysia must be the strongest in this region. In terms of the capitalisation ratio as at May, I think the industry’s RWCR (risk-weighted capital ratio) was 14.2% and the net NPL ratio was 2.2%. The net NPL ratio has been holding steady for the past nine months. Some banks are recording lower profits but in the scheme of things it is still profitable.
Should banks adopt the model of conservatism and safety especially in view of things that have happened overseas or should they be a little more adventurous?
We have to go back to basics. The role of banks is to mobilise savings and rechannel them to the productive sectors of the economy.
And the protection of depositors’ money should be paramount. I don’t think banks should be overly adventurous and change their risk profile and jeopardise deposits.
As you progress, there will be various risk management instruments, such as deposit insurance, but these are just additional tools.
Given the increasing regional presence of large banks, do you still think the future of these banks is still Malaysia?
The domestic market will have its limits in terms of growth. Domestic loans growth is in single digit and if a bank wants growth, it has to look beyond our shores in markets where the banking penetration is relatively low.
Indonesia has a population of 235 million and the banking penetration there in terms of loans to GDP is 31%. It means there is high growth potential. Expanding operations to capture that growth and later on profit would be highly relevant for us.
But that does not mean we must ignore our domestic market. There is no way any company can claim to be a regional or global champion if its home base is weak. The home base will provide the core earnings for a bank to be able to expand abroad.
Are you paying more attention to foreign operations than local at this moment?
Before you grow abroad you have to make sure you have the necessary financial and human capital resources. On human capital, it is important to compartmentalise and have a dedicated team to run the international operations.
The way we run it, as in the case of Indonesia, is that we make sure we assemble a solid team on-site in Jakarta to run it as a full-fledged bank there. My role as group CEO is to guide them from a strategic perspective. I have managers in international (operations) who will oversee them and I spend about two days a month in Jakarta with management to go over the strategy and their performance.
You spent RM11.1bil buying three assets abroad, how important is expansion abroad to the future of Maybank?
I think it is important from a growth perspective. Foreign loans account for 30% of the group’s total and the idea is to have foreign operations contribute about 40% of loans.Eventually, as we grow further, it will be 50:50.
In terms of profit contribution, we are looking at one third initially and over time that will increase.
In terms of growth, they provide double-digit growth prospects. It is also important from the perspective of being relevant to our customers.
Having expanded their operations in Singapore, Indonesia, the Philippines and Indochina, we are able to support them. We start by providing support to customers we are familiar with. Over time, we will develop a strong client base in Indonesia as our base there grows. There will be benefits of having a cross-border linkage.
How would the competitive landscape in those countries influence decisions and the business model?
We do not adopt a one-size-fits-all concept. Banking operations in each country are tailor made to the situation in each country.
We apply the same risk-management standards in every country even though the business model can be different.
How will Islamic banking feature in an international perspective?
We are already the largest Islamic bank in terms of assets and we want to be holistic. We have been improving in terms of our loans to deposit ratio.
The next is to look at Indonesia. It’s still early days but with BII being established there, the setting up of a parallel syariah banking entity will be our next goal.
Islamic finance in Indonesia is not yet 5% of the banking assets there. Like Malaysia, it is growing very fast.
We also look at other non-traditional Islamic markets such as Singapore.
There is a high level of Islamic finance awareness and we have tried introducing some new products in Singapore.
By JAGDEV SINGH SIDHU
Its push for regionalisation will continue as other players seek opportunities in the region as well.
The changing landscape of banking has brought about many opportunities for banks in the country and it is no different for Malayan Banking Bhd, the largest bank in the country.
Maybank, like many others, is set on growing its staple businesses and is fleshing out the segments in which it is weak. But what excites the bank the most has been the source of much of its recent criticism.
Regionalisation, which had come at a great cost to Maybank, is seen as a segment of business that excites the upper echelon of management. The prospect of tagging on high-growth markets to the more placid growth markets in Malaysia is seen as the ideal tonic for the bank.
“For the banking entity, the push for regionalisation will continue and others will be looking for opportunities in the region as well,’’ says Maybank president and CEO Datuk Seri Abdul Wahid Omar.
Maybank spent RM11.1bil acquiring three banks just before the financial crisis engulfed much of the world.
The resulting recession seen in much of the developed world dragged down growth rates and dampened prospects throughout the world.
For Maybank, it had an added task of managing a transition of ownership, particularly in the next crown jewel of its overseas operations – Bank Internasional Indonesia (BII).
“As far as BII is concerned, because of the transition, it has not fully grown for the moment. And we want to make sure we put in place the necessary infrastructure before we push for growth. Our asset size has been relatively flat over the past one year,’’ he says. “We will start to expand a bit more aggressively from September.”
The under-banked market in Indonesia – where the banking penetration is just 33% to gross domestic product (GDP) – offers tremendous medium to long-term prospects to Maybank.
The market in Indonesia is also a fertile ground for Maybank to start cultivating its Islamic finance business as that business makes up just 5% of the market there.
The excitement also extends to Malaysia where Wahid says Islamic banking makes up 17% of total assets but the growth is twice as fast as conventional banking.
“As you cross the 20% to 25% range and reach a third, then you will see critical mass and with that innovation will come,’’ he says.
Wahid says the Islamic capital market is also interesting although it has been affected by the economic environment and the availability of conventional funding at very low rates.
“But as the economy recovers, capital-market activity will return such as sukuks and various other structures coming into place,’’ he says. “We also have takaful under Etiqa and some wealth management under Maybank Islamic. Eventually we are looking to consolidate everything under one entity, and that is Maybank Islamic.’’
Another exciting business segment for Wahid is Internet banking.
Maybank currently has the largest number of customers who do banking online through its Internet banking channel – 3.3 million out of a customer base of eight million – and he expects them to conduct more diverse transactions in the future.
“Currently, a lot of them are doing basic transactions but we are beginning to see other types of transactions such as the purchase of other products and money transfers,’’ he says. “Even though the penetration on mobile is not there yet, it is something we see happening in the next five years.’’
Domestically, Wahid feels Maybank could do more in investment banking and stockbroking.
“Although in debt capital markets we are ranked second, in the equity capital markets we are probably number three or four,’’ he says, adding that he wants to close the gap with the leaders.
Maybank, he says, has spent the downtime in investment banking this year on beefing up skills and resources so as to capitalise when the markets pick up next year.
In stockbroking, Wahid says Maybank is ranked seventh or eighth and that more needs to be done to tap the group’s vast branch network to grow that business.
“Once we get the infrastructure improved and strengthen our management on the broking side, and coupled with Internet banking and broking, we can make good advancement,’’ he says.
On asset management, Wahid says Maybank has made a conscious decision to park its asset management business under its insurance business so that the group can have a sizeable amount of funds under management.
“With that we can look at RM20bil of assets under management and from there we can strengthen our capabilities before going out and managing third-party clients,’’ he says, adding that the group is at least a couple of years away from managing a substantial amount of business for third-party clients.
“We also need to rebuild our unit trust management,’’ he says.
StarBizWeek: Has the crisis opened an avenue for Maybank?
Wahid: It has, from the corporate banking perspective. The large foreign players have slowed down and allowed us to gain dominance and prominence in that market. It has also helped us in terms of pricing.
Until recently it was so competitive, and many corporates were enjoying 50-basis-point spread over the cost of funds. But now the pricing is better and these people are paying close to 100 basis points.
What are the problem areas?
In terms of non-performing loans (NPLs), they are manageable. The net NPL ratio continues to decline. At end-March, it was 1.76% compared with the industry’s 2.2%.
We expect the number to have improved further after June.
There are concerns there could be a delayed effect, in the second half of the year, from customers who are suffering and who have run out of cash and no longer enjoy the indulgence from banks. So far, we think it is manageable.
The good news is that the economy has seen its bottom in the first quarter. We should be seeing improvement in the second quarter. From minus 7.7%, we should be seeing upwards of 2% on a quarter-on-quarter basis.
As the head of the Association of Banks, what is your view on the state of the banking industry?
Malaysia must be the strongest in this region. In terms of the capitalisation ratio as at May, I think the industry’s RWCR (risk-weighted capital ratio) was 14.2% and the net NPL ratio was 2.2%. The net NPL ratio has been holding steady for the past nine months. Some banks are recording lower profits but in the scheme of things it is still profitable.
Should banks adopt the model of conservatism and safety especially in view of things that have happened overseas or should they be a little more adventurous?
We have to go back to basics. The role of banks is to mobilise savings and rechannel them to the productive sectors of the economy.
And the protection of depositors’ money should be paramount. I don’t think banks should be overly adventurous and change their risk profile and jeopardise deposits.
As you progress, there will be various risk management instruments, such as deposit insurance, but these are just additional tools.
Given the increasing regional presence of large banks, do you still think the future of these banks is still Malaysia?
The domestic market will have its limits in terms of growth. Domestic loans growth is in single digit and if a bank wants growth, it has to look beyond our shores in markets where the banking penetration is relatively low.
Indonesia has a population of 235 million and the banking penetration there in terms of loans to GDP is 31%. It means there is high growth potential. Expanding operations to capture that growth and later on profit would be highly relevant for us.
But that does not mean we must ignore our domestic market. There is no way any company can claim to be a regional or global champion if its home base is weak. The home base will provide the core earnings for a bank to be able to expand abroad.
Are you paying more attention to foreign operations than local at this moment?
Before you grow abroad you have to make sure you have the necessary financial and human capital resources. On human capital, it is important to compartmentalise and have a dedicated team to run the international operations.
The way we run it, as in the case of Indonesia, is that we make sure we assemble a solid team on-site in Jakarta to run it as a full-fledged bank there. My role as group CEO is to guide them from a strategic perspective. I have managers in international (operations) who will oversee them and I spend about two days a month in Jakarta with management to go over the strategy and their performance.
You spent RM11.1bil buying three assets abroad, how important is expansion abroad to the future of Maybank?
I think it is important from a growth perspective. Foreign loans account for 30% of the group’s total and the idea is to have foreign operations contribute about 40% of loans.Eventually, as we grow further, it will be 50:50.
In terms of profit contribution, we are looking at one third initially and over time that will increase.
In terms of growth, they provide double-digit growth prospects. It is also important from the perspective of being relevant to our customers.
Having expanded their operations in Singapore, Indonesia, the Philippines and Indochina, we are able to support them. We start by providing support to customers we are familiar with. Over time, we will develop a strong client base in Indonesia as our base there grows. There will be benefits of having a cross-border linkage.
How would the competitive landscape in those countries influence decisions and the business model?
We do not adopt a one-size-fits-all concept. Banking operations in each country are tailor made to the situation in each country.
We apply the same risk-management standards in every country even though the business model can be different.
How will Islamic banking feature in an international perspective?
We are already the largest Islamic bank in terms of assets and we want to be holistic. We have been improving in terms of our loans to deposit ratio.
The next is to look at Indonesia. It’s still early days but with BII being established there, the setting up of a parallel syariah banking entity will be our next goal.
Islamic finance in Indonesia is not yet 5% of the banking assets there. Like Malaysia, it is growing very fast.
We also look at other non-traditional Islamic markets such as Singapore.
There is a high level of Islamic finance awareness and we have tried introducing some new products in Singapore.
Bank Islam bids for Bank Muamalat stake-paper
KUALA LUMPUR -
Malaysia's Bank Islam is in talks with several stakeholders in Indonesia's PT Bank Muamalat and wants to take control of the Indonesian Islamic bank, the Business Times reported on Monday.
Without citing named sources, the newspaper said that Bank Islam was close to a deal with at least one of the stakeholders.
No one from Bank Islam was immediately available for comment.
Bank Muamalat's main shareholders are based in the Gulf and it had a net profit of 207 billion rupiah ($20.93 million) in 2008, the paper said.
Malaysia's Bank Islam is in talks with several stakeholders in Indonesia's PT Bank Muamalat and wants to take control of the Indonesian Islamic bank, the Business Times reported on Monday.
Without citing named sources, the newspaper said that Bank Islam was close to a deal with at least one of the stakeholders.
No one from Bank Islam was immediately available for comment.
Bank Muamalat's main shareholders are based in the Gulf and it had a net profit of 207 billion rupiah ($20.93 million) in 2008, the paper said.
Friday, July 31, 2009
Indonesia's Pertamina signs $700 mln capex loans
JAKARTA -
Indonesia's state oil and gas firm Pertamina signed on Friday syndicated loans worth $400 million and 3 trillion rupiah ($302.6 million) with local and foreign banks to fund upstream and downstream projects.
The dollar loan involves 16 banks, including Citigroup (C.N) unit Citibank NA, Bank of Tokyo-Mitsubishi UFJ (8306.T) and Sumitono Mitsui Banking Corporation (8316.T), a statement from local lender PT Bank Mandiri (BMRI.JK) said.
Citigroup is lead arranger for the loan.
"We believe this loan facility can speed up Pertamina's expansions and business developments in the future, in line with the strategic target set by the company," Karen Agustiawan, Pertamina's president director, said in a statement.
The $400 million loan has a maturity of three years and would pay 338 basis points above the London inter-bank offered rate (LIBOR), Pertamina Finance Director Ferederick Siahaan said.
Mandiri is lead arranger for the rupiah loan and will lend 1.25 trillion rupiah, while 750 billion comes from PT Bank Negara Indonesia (BBNI.JK), 500 billion rupiah from PT Bank Rakyat Indonesia (BBRI.JK) and 500 billion from PT Bank Central Asia (BBCA.JK).
Siahaan told reporters Pertamina planned to spend 22 trillion rupiah on capital expenditure in 2009, with 65 percent allocated for upstream activities and 35 percent for downstream. The firm is estimated to have invested 17 trillion rupiah in 2008.
"There are many Pertamina projects that need to be financed, including upstream and downstream. Upstream projects include Cepu and the offshore North West Java block," he said.
Pertamina has a 45 percent stake in the Cepu block in East Java, which will become one of Indonesia biggest oil projects with reserves of around 600 million barrels.
Exxon Mobil (XOM.N) has another 45 percent and regional governments hold the remaining 10 percent in Cepu.
Siahaan also said funds were needed to pay for preparations for a new refinery in West Java. Pertamina has said it plans to build a new refinery with a capacity of 150,000 barrels per day (bpd) in a join venture with Iran and Malaysia in West Java. Construction is expected to start next year.
Siahaan also said Pertamina was considering issuing bonds in 2010 as part of its financing plans, but he gave no details.
The state oil firm, which is under political pressure to help boost the country's flagging oil production, has said it aims to lift its oil output by about 10 percent to 171,000 barrels per day this year, up from 156,000 bpd in 2008.
Pertamina also has a long-term target of boosting refining capacity by 700,000 bpd from the current 1 million bpd at its nine refineries. The state oil firm's nine refineries have a combined capacity of around 1 million barrels per day (bpd). But they only supply 70 percent of domestic oil product consumption, and 30 percent comes from imports.
Efforts to build new refineries have stalled in recent years, with potential investors saying the returns are not favourable enough.
Indonesia's state oil and gas firm Pertamina signed on Friday syndicated loans worth $400 million and 3 trillion rupiah ($302.6 million) with local and foreign banks to fund upstream and downstream projects.
The dollar loan involves 16 banks, including Citigroup (C.N) unit Citibank NA, Bank of Tokyo-Mitsubishi UFJ (8306.T) and Sumitono Mitsui Banking Corporation (8316.T), a statement from local lender PT Bank Mandiri (BMRI.JK) said.
Citigroup is lead arranger for the loan.
"We believe this loan facility can speed up Pertamina's expansions and business developments in the future, in line with the strategic target set by the company," Karen Agustiawan, Pertamina's president director, said in a statement.
The $400 million loan has a maturity of three years and would pay 338 basis points above the London inter-bank offered rate (LIBOR), Pertamina Finance Director Ferederick Siahaan said.
Mandiri is lead arranger for the rupiah loan and will lend 1.25 trillion rupiah, while 750 billion comes from PT Bank Negara Indonesia (BBNI.JK), 500 billion rupiah from PT Bank Rakyat Indonesia (BBRI.JK) and 500 billion from PT Bank Central Asia (BBCA.JK).
Siahaan told reporters Pertamina planned to spend 22 trillion rupiah on capital expenditure in 2009, with 65 percent allocated for upstream activities and 35 percent for downstream. The firm is estimated to have invested 17 trillion rupiah in 2008.
"There are many Pertamina projects that need to be financed, including upstream and downstream. Upstream projects include Cepu and the offshore North West Java block," he said.
Pertamina has a 45 percent stake in the Cepu block in East Java, which will become one of Indonesia biggest oil projects with reserves of around 600 million barrels.
Exxon Mobil (XOM.N) has another 45 percent and regional governments hold the remaining 10 percent in Cepu.
Siahaan also said funds were needed to pay for preparations for a new refinery in West Java. Pertamina has said it plans to build a new refinery with a capacity of 150,000 barrels per day (bpd) in a join venture with Iran and Malaysia in West Java. Construction is expected to start next year.
Siahaan also said Pertamina was considering issuing bonds in 2010 as part of its financing plans, but he gave no details.
The state oil firm, which is under political pressure to help boost the country's flagging oil production, has said it aims to lift its oil output by about 10 percent to 171,000 barrels per day this year, up from 156,000 bpd in 2008.
Pertamina also has a long-term target of boosting refining capacity by 700,000 bpd from the current 1 million bpd at its nine refineries. The state oil firm's nine refineries have a combined capacity of around 1 million barrels per day (bpd). But they only supply 70 percent of domestic oil product consumption, and 30 percent comes from imports.
Efforts to build new refineries have stalled in recent years, with potential investors saying the returns are not favourable enough.
Indonesia Hot Stocks-Bumi shares up following convertible bond
JAKARTA -
Shares in Indonesia's biggest coal producer, PT Bumi Resources Tbk (BUMI.JK), jumped by as much as 18.6 percent on Friday, after a special purpose vehicle owned by the firm raised $375 million in a convertible bond offering.
Evercoal Resources has raised almost double the original target of $200 million from the sale of the five-year bonds which are guaranteed and transferable to Bumi. The bonds have a coupon of 9.25 percent.
Shares in Bumi ended up 12.37 percent at the close of the first session, outperforming the broader market .JKSE which ended up 0.89 percent.
A trader in Jakarta, who declined to be identified by name, said the increase in the size of the bond issue reflected increasing risk appetite, at a time when interest in Indonesia has picked up.
Bumi's share price has almost trebled so far this year, while Indonesia Composite Index has risen about 71 percent. (31 July 2009)
Shares in Indonesia's biggest coal producer, PT Bumi Resources Tbk (BUMI.JK), jumped by as much as 18.6 percent on Friday, after a special purpose vehicle owned by the firm raised $375 million in a convertible bond offering.
Evercoal Resources has raised almost double the original target of $200 million from the sale of the five-year bonds which are guaranteed and transferable to Bumi. The bonds have a coupon of 9.25 percent.
Shares in Bumi ended up 12.37 percent at the close of the first session, outperforming the broader market .JKSE which ended up 0.89 percent.
A trader in Jakarta, who declined to be identified by name, said the increase in the size of the bond issue reflected increasing risk appetite, at a time when interest in Indonesia has picked up.
Bumi's share price has almost trebled so far this year, while Indonesia Composite Index has risen about 71 percent. (31 July 2009)
Monday, July 27, 2009
BANK RAKYAT INDONESIA SET TO ACQUIRE BANK BUKOPIN
JAKARTA-
PT Bank Rakyat Indonesia (BRI) (JSX:BBRI) said it was eyeing several banks including PT Bank Bukopin (JSX:BBKP) to support its plans to consolidate its business in Indonesia's retail sector.
Sofyan Basir, the president of the state lender, said the bank has enough cash to buy a mid-sized bank with strong credit market in small and medium enterprise and consumer business sector.
Discussion is in progress on acquisition of Bank Bkopin, which is partly owned by the government, Basir was quoted as saying by the newspaper Jakarta Globe.
A source at the office of the state minister for state enterprises said BRI, Indonesia's second largest bank in assets, was set to finalize the acquisition of Bukopin by the end of this year.
PT Bank Rakyat Indonesia (BRI) (JSX:BBRI) said it was eyeing several banks including PT Bank Bukopin (JSX:BBKP) to support its plans to consolidate its business in Indonesia's retail sector.
Sofyan Basir, the president of the state lender, said the bank has enough cash to buy a mid-sized bank with strong credit market in small and medium enterprise and consumer business sector.
Discussion is in progress on acquisition of Bank Bkopin, which is partly owned by the government, Basir was quoted as saying by the newspaper Jakarta Globe.
A source at the office of the state minister for state enterprises said BRI, Indonesia's second largest bank in assets, was set to finalize the acquisition of Bukopin by the end of this year.
Thursday, July 16, 2009
BANK RAKYAT INDONESIA EYEING PT BANK BUKOPIN
JAKARTA-
The management of state bank, Bank Rakyat Indonesia (BRI), is eyeing PT Bank Bukopin (JSX:BBKP), a bank partly owned by the government.
There has been no official talk with Bukopin, but BRI is optimistic the process would go smoothly, BRI director Bambang Supeno said.
BRI failed in its attempt to acquire Bank Tabungan Negara (BTN), another state bank, as the plan was rejected by the House of Representatives.
A decision would be made after a new cabinet was formed following last week's presidential election, Bambang said.
BRI chief commissioner Bunasor Sanim said the bank management had proposed the plan to acquire Bukopin to the board of commissioners.
The management of state bank, Bank Rakyat Indonesia (BRI), is eyeing PT Bank Bukopin (JSX:BBKP), a bank partly owned by the government.
There has been no official talk with Bukopin, but BRI is optimistic the process would go smoothly, BRI director Bambang Supeno said.
BRI failed in its attempt to acquire Bank Tabungan Negara (BTN), another state bank, as the plan was rejected by the House of Representatives.
A decision would be made after a new cabinet was formed following last week's presidential election, Bambang said.
BRI chief commissioner Bunasor Sanim said the bank management had proposed the plan to acquire Bukopin to the board of commissioners.
DBS Bank Targets Local Indonesian Bank
One of Asian top banks, DBS, will expand in Indonesia, The largest Singapore-based bank will also acquire a local bank.
"Bank acquisition is possible as long as it provides us with more value," said Bank DBS Indonesia Commissioner Bernard Tan on Thursday, July 16.
The total assets of DBS Bank reach Sin$182.7 billion in 2008.
Bernard said Indonesia is an important and strategic market due to the high potential of the nation's economic growth.
DBS runs operation in 16 countries worldwide such as the United States, England, China, Japan, Hong Kong, India, South Korea, Malaysia, Philippines, Vietnam, and Taiwan.
"Bank acquisition is possible as long as it provides us with more value," said Bank DBS Indonesia Commissioner Bernard Tan on Thursday, July 16.
The total assets of DBS Bank reach Sin$182.7 billion in 2008.
Bernard said Indonesia is an important and strategic market due to the high potential of the nation's economic growth.
DBS runs operation in 16 countries worldwide such as the United States, England, China, Japan, Hong Kong, India, South Korea, Malaysia, Philippines, Vietnam, and Taiwan.
BRI SAYS MAY BUY STAKE IN BUKOPIN
JAKARTA-
Indonesia's second-largest lender, PT Bank Rakyat Indonesia Tbk (BBRI.JK), is considering buying a stake in lender PT Bank Bukopin, Compliance Director Bambang Supeno said.
Indonesia's second-largest lender, PT Bank Rakyat Indonesia Tbk (BBRI.JK), is considering buying a stake in lender PT Bank Bukopin, Compliance Director Bambang Supeno said.
Indonesia's Bank Danamon Q2 net profit down 20 pct
JAKARTA -
Indonesia's sixth-largest lender, PT Bank Danamon Tbk (BDMN.JK), on Thursday reported a 20 percent drop in second-quarter net profit. The lender, controlled by a consortium which includes Singapore's state investor Temasek Holdings [TEM.UL] and Deutsche Bank (DBKGn.DE), said net profit for April-June fell to 477 billion rupiah ($47.25 million) from 595.3 billion rupiah a year ago.
Analysts polled by Reuters Estimates had expected Danamon to post a net profit of 1.93 trillion rupiah in 2009, up from 1.53 trillion rupiah last year. ($1 = 10,095 rupiah)
Indonesia's sixth-largest lender, PT Bank Danamon Tbk (BDMN.JK), on Thursday reported a 20 percent drop in second-quarter net profit. The lender, controlled by a consortium which includes Singapore's state investor Temasek Holdings [TEM.UL] and Deutsche Bank (DBKGn.DE), said net profit for April-June fell to 477 billion rupiah ($47.25 million) from 595.3 billion rupiah a year ago.
Analysts polled by Reuters Estimates had expected Danamon to post a net profit of 1.93 trillion rupiah in 2009, up from 1.53 trillion rupiah last year. ($1 = 10,095 rupiah)
Indonesia banks report profits, loan growth targets
Danamon Q2 net profit down 20 pct to 477 bln rupiah
* Danamon Q2 net interest income up 25 percent
* BNI Q2 net profit more than doubles
* BNI Q2 net interest income up 19 percent
* BNI revises loan growth target to 14 pct from 16-18 pct
JAKARTA -
Two Indonesian banks on Thursday reported profits for the second quarter but indicated that the lending environment in Southeast Asia's biggest economy remains difficult amid a global economic slowdown.
The country's sixth-largest lender, PT Bank Danamon Tbk (BDMN.JK), said second-quarter net profit fell 20 percent to 477 billion rupiah ($47.25 million) from 595.3 billion rupiah a year ago, citing the high cost of funds and credit.
"In the first half 2009 compared to first half 2008 there was a drop mainly because of high cost of funds we experience in the first quarter of this year and also high cost of credit across the banking sector in indonesia," said Danamon's President Director Sebastian Paredes.
Net interest income in the second quarter climbed 25 percent to 2.345 trillion rupiah from 1.88 trillion rupiah a year earlier.
The lender reported a gross non-performing loan (NPL) ratio of 3.5 percent in the January-June period, compared to 2.3 percent a year ago.
PT Bank Negara Indonesia, the fourth-largest lender, said net profit doubled in the second quarter but it revised its loan growth target for 2009 down to 14 percent, from a previous forecast of 16-18 percent, saying that first-quarter lending was not as high as expected.
"In the first quarter we did not see a pick up in lending so we take a more conservative figure of 14 percent until the end of 2009," said President Director Gatot Suwondo in a news conference.
Analysts polled by Reuters Estimates had expected Danamon to post a net profit of 1.93 trillion rupiah in 2009, up from 1.53 trillion rupiah last year. They expect BNI to post a net profit of 2.219 trillion rupiah, up from 1.222 trillion last year. ($1 = 10,095 rupiah)
* Danamon Q2 net interest income up 25 percent
* BNI Q2 net profit more than doubles
* BNI Q2 net interest income up 19 percent
* BNI revises loan growth target to 14 pct from 16-18 pct
JAKARTA -
Two Indonesian banks on Thursday reported profits for the second quarter but indicated that the lending environment in Southeast Asia's biggest economy remains difficult amid a global economic slowdown.
The country's sixth-largest lender, PT Bank Danamon Tbk (BDMN.JK), said second-quarter net profit fell 20 percent to 477 billion rupiah ($47.25 million) from 595.3 billion rupiah a year ago, citing the high cost of funds and credit.
"In the first half 2009 compared to first half 2008 there was a drop mainly because of high cost of funds we experience in the first quarter of this year and also high cost of credit across the banking sector in indonesia," said Danamon's President Director Sebastian Paredes.
Net interest income in the second quarter climbed 25 percent to 2.345 trillion rupiah from 1.88 trillion rupiah a year earlier.
The lender reported a gross non-performing loan (NPL) ratio of 3.5 percent in the January-June period, compared to 2.3 percent a year ago.
PT Bank Negara Indonesia, the fourth-largest lender, said net profit doubled in the second quarter but it revised its loan growth target for 2009 down to 14 percent, from a previous forecast of 16-18 percent, saying that first-quarter lending was not as high as expected.
"In the first quarter we did not see a pick up in lending so we take a more conservative figure of 14 percent until the end of 2009," said President Director Gatot Suwondo in a news conference.
Analysts polled by Reuters Estimates had expected Danamon to post a net profit of 1.93 trillion rupiah in 2009, up from 1.53 trillion rupiah last year. They expect BNI to post a net profit of 2.219 trillion rupiah, up from 1.222 trillion last year. ($1 = 10,095 rupiah)
IMF asks Indonesian central bank to stop rates decrease
JAKARTA-
The International Monetary Fund (IMF) suggested the Indonesian central bank, Bank Indonesia (BI), to leave the regime of interest rates decrease policy starting from the second semester this year following the expectation of increasing commodity prices and improving demand in line with the recovery of the world's economy.
Milan Zavadjil, the agency's Chief Representative for Indonesia, said that the central bank's approach should be careful ahead of the end of the year. He said that further interest rates cuts were irrelevant anymore with the current condition.
He argued that the big monetary stimulus channeled to the banking system would eventually show its impact. In the same time, high level liquidity should be handled with proper policies.
"We believe that the BI has a limited room to further cut rate seven though inflation pressure has been receding lately and we see rupiah appreciation," he told the daily on Monday.
In the World Economic Outlook (WEO) Update released by the agency last week, countries were considered starting to get out of the worst economic crisis since the World War II. However, the process to recovery was predicted to go slow.
In the report, improving commodity prices and demand in line with economic recovery in advanced nations lately were predicted to provide pressure to the world's inflation next year.
Generally, developing countries were suggested to lower their interest rates if their have low rates of inflation. However, there should be some careful considerations to avoid disruption in foreign exchange rates and capital outflow.
According to Zavadjil, further decreasing interest rates were not suitable for Indonesia anymore. "The Indonesian economy is starting to grow rapidly. Besides, there are challenges from increasing commodity prices that could contribute to acceleration on inflation speed," he said.
Since December 2008 to July 2009, the BI had been reducing interest rates by 275 basis points to 6.75 percent currently as a response of decreasing inflation speed. In July 2009, year-on-year inflation was recorded at 3.65 percent.
The International Monetary Fund (IMF) suggested the Indonesian central bank, Bank Indonesia (BI), to leave the regime of interest rates decrease policy starting from the second semester this year following the expectation of increasing commodity prices and improving demand in line with the recovery of the world's economy.
Milan Zavadjil, the agency's Chief Representative for Indonesia, said that the central bank's approach should be careful ahead of the end of the year. He said that further interest rates cuts were irrelevant anymore with the current condition.
He argued that the big monetary stimulus channeled to the banking system would eventually show its impact. In the same time, high level liquidity should be handled with proper policies.
"We believe that the BI has a limited room to further cut rate seven though inflation pressure has been receding lately and we see rupiah appreciation," he told the daily on Monday.
In the World Economic Outlook (WEO) Update released by the agency last week, countries were considered starting to get out of the worst economic crisis since the World War II. However, the process to recovery was predicted to go slow.
In the report, improving commodity prices and demand in line with economic recovery in advanced nations lately were predicted to provide pressure to the world's inflation next year.
Generally, developing countries were suggested to lower their interest rates if their have low rates of inflation. However, there should be some careful considerations to avoid disruption in foreign exchange rates and capital outflow.
According to Zavadjil, further decreasing interest rates were not suitable for Indonesia anymore. "The Indonesian economy is starting to grow rapidly. Besides, there are challenges from increasing commodity prices that could contribute to acceleration on inflation speed," he said.
Since December 2008 to July 2009, the BI had been reducing interest rates by 275 basis points to 6.75 percent currently as a response of decreasing inflation speed. In July 2009, year-on-year inflation was recorded at 3.65 percent.
INDONESIAN BANKS MAY CUT INTEREST RATES TO 10%
JAKARTA - Banks could cut their corporate credit interest rates to as low as 10 per cent in the second half of this year to follow the lead by the central bank, a senior banker said.
The steady cut in Bank Indonesia benchmark interest rate (BI Rate) and improving economic condition would allow banks to offer cheaper credits, Sudargo Sudaryanto, the corporate director of state lender Bank Rakyat Indonesia (BRI) (JSX:BBRI) said.
Currently the interest rate on corporate credit offered by BRI ranges from 12 per cent-23 per cent, Sudargo said.
In the past several months BRI already cut its interest rates by 50 basis points every month, he said, adding, the bank hopes to be able to continue the policy to encourage borrowers.
The bank has large undisbursed loans, he was quoted as saying by the newspaper Investor Daily without giving figure.
Meanwhile, Krishna Suparto, corporate director of PT Bank Negara Indonesia (BNI) (JSX:BBNI), another state lender, said if the BI Rate is cut further to 6 per cent from 6.75 per cent at present, BNI would be able to offer cheaper credit at an interest rate of 10 per cent.
The steady cut in Bank Indonesia benchmark interest rate (BI Rate) and improving economic condition would allow banks to offer cheaper credits, Sudargo Sudaryanto, the corporate director of state lender Bank Rakyat Indonesia (BRI) (JSX:BBRI) said.
Currently the interest rate on corporate credit offered by BRI ranges from 12 per cent-23 per cent, Sudargo said.
In the past several months BRI already cut its interest rates by 50 basis points every month, he said, adding, the bank hopes to be able to continue the policy to encourage borrowers.
The bank has large undisbursed loans, he was quoted as saying by the newspaper Investor Daily without giving figure.
Meanwhile, Krishna Suparto, corporate director of PT Bank Negara Indonesia (BNI) (JSX:BBNI), another state lender, said if the BI Rate is cut further to 6 per cent from 6.75 per cent at present, BNI would be able to offer cheaper credit at an interest rate of 10 per cent.
Friday, July 10, 2009
BNY Mellon, Danamon face $4 bln Indonesian suit
JAKARTA/SINGAPORE, July 10 (Reuters) - Bank of New York Mellon (BK.N) and Indonesia's Bank Danamon (BDMN.JK) are being sued for $4 billion in Indonesia in a dispute between international bondholders and the owner of a shrimp firm, Indonesian court documents show.
The dispute highlights the difficulties investors often face in Indonesia in enforcing their rights and comes as at a sensitive time. Many foreign investors have been increasing their exposure to the country on the back of strong growth and expectations of continued political stability following the re-election of President Susilo Bambang Yudhoyono this week.
The case involves a group of international investors who bought a $200 million bond issue, and the banks who acted as the trustee and security agent for the debt. The bonds were issued in 2007 by Red Dragon, controlled by Thailand's powerful Jiaravanon family.
The dispute has pitted the investors and banks against Red Dragon and three other firms controlled by the Jiaravanon family, all of which own stakes in Indonesian shrimp exporter PT Central Proteina Prima (CP Prima) (CPRO.JK), according to stock exchange records dating from the time of the bond issue.
The other three companies -- Regent Central International, Charm Easy and PT Surya Hidup Satwa (SHS) -- jointly backed Red Dragon's bond by pledging their shares in CP Prima to back the issuance. Red Dragon and these companies together controlled 70.3 percent of CP Prima, according to court documents seen by Reuters.
The dispute escalated last year when the value of CP Prima's shares and bonds plunged. Attempts to restructure the debt failed and bond holders ordered Bank of New York Mellon, the trustee, and PT Bank Danamon, the security agent, to transfer some of the shares held as collateral to the bondholders, sparking several lawsuits.
According to a press statement issued by the bondholders' representative, about 12 percent of the shares in CP Prima have been transferred and the transfer of the remaining 58 percent has begun.
In the latest twist to the saga, the four CP Prima shareholders have filed lawsuits in the central Jakarta district court against Bank of New York Mellon and Bank Danamon.
Each company claimed $1 billion in damages for transferring some of the shares held as collateral to Red Dragon bondholders, bringing the total compensation to $4 billion.
In court documents seen by Reuters, the four companies said both Bank of New York Mellon and Danamon "have committed torts through the execution of shares in a manner that is against the law". Fransiska Oei, Danamon director, said in a statement to Reuters that Danamon had received lawsuits from three parties: Red Dragon Group Pte Ltd, PT Surya Hidup Satwa and Regent Central International Limited.
"Danamon will study the lawsuits and in time will deliver its right of reply to the court. Related to the lawsuits, we need to convey that Danamon has acted in accordance to its roles and responsibility as the security agent which was appointed by Bank of New York Mellon," she said in the statement.
In June 2007, Red Dragon, a Singapore special purpose vehicle controlled by the Jiaravanon family, issued the $200 million, 2 percent secured exchangeable bonds due 2010 to a group of international investors.
At the time, Red Dragon owned 11.9 percent of CP Prima and pledged that CP Prima stake against the bond. Three other entities connected to the Jiaravanon family also pledged CP Prima shares for the bond offering.
The entities -- SHS, Regent Central, and Charm Easy -- owned a combined 58.4 percent of CP Prima, so the total amount of protection the group was offering on the bond equaled 70.3 percent, according to the court legal documents seen by Reuters.
CP Prima's stock went from 760 rupiah per share in July 2007 to 160 rupiah in Sept. 2008, knocking down the value of the bonds in the process.
What incensed the bondholders was an initiative late last year to embark on a rights offering, or an issue of new stock to existing shareholders that raises money for the company.
Bondholders argued that the rights issue would dilute CP Prima's shareholdings and therefore dilute protection against the Red Dragon bond.
In April 2009, the bondholders fought back, instructing the trustee to accelerate bond payments and to commence enforcement actions over the offshore collateral by seizing funds held by Red Dragon in offshore bank accounts.
Bank of New York declined to comment for the story.
Negotiations to restructure the bonds failed, and on May 12, the lawsuits began to fly.
Red Dragon and Pertiwi also filed claims in England against Bank of New York as Trustee and Bank Danamon as Security Agent -- the two entities acting on behalf of the bondholders, another legal document seen by Reuters showed.
The dispute highlights the difficulties investors often face in Indonesia in enforcing their rights and comes as at a sensitive time. Many foreign investors have been increasing their exposure to the country on the back of strong growth and expectations of continued political stability following the re-election of President Susilo Bambang Yudhoyono this week.
The case involves a group of international investors who bought a $200 million bond issue, and the banks who acted as the trustee and security agent for the debt. The bonds were issued in 2007 by Red Dragon, controlled by Thailand's powerful Jiaravanon family.
The dispute has pitted the investors and banks against Red Dragon and three other firms controlled by the Jiaravanon family, all of which own stakes in Indonesian shrimp exporter PT Central Proteina Prima (CP Prima) (CPRO.JK), according to stock exchange records dating from the time of the bond issue.
The other three companies -- Regent Central International, Charm Easy and PT Surya Hidup Satwa (SHS) -- jointly backed Red Dragon's bond by pledging their shares in CP Prima to back the issuance. Red Dragon and these companies together controlled 70.3 percent of CP Prima, according to court documents seen by Reuters.
The dispute escalated last year when the value of CP Prima's shares and bonds plunged. Attempts to restructure the debt failed and bond holders ordered Bank of New York Mellon, the trustee, and PT Bank Danamon, the security agent, to transfer some of the shares held as collateral to the bondholders, sparking several lawsuits.
According to a press statement issued by the bondholders' representative, about 12 percent of the shares in CP Prima have been transferred and the transfer of the remaining 58 percent has begun.
In the latest twist to the saga, the four CP Prima shareholders have filed lawsuits in the central Jakarta district court against Bank of New York Mellon and Bank Danamon.
Each company claimed $1 billion in damages for transferring some of the shares held as collateral to Red Dragon bondholders, bringing the total compensation to $4 billion.
In court documents seen by Reuters, the four companies said both Bank of New York Mellon and Danamon "have committed torts through the execution of shares in a manner that is against the law". Fransiska Oei, Danamon director, said in a statement to Reuters that Danamon had received lawsuits from three parties: Red Dragon Group Pte Ltd, PT Surya Hidup Satwa and Regent Central International Limited.
"Danamon will study the lawsuits and in time will deliver its right of reply to the court. Related to the lawsuits, we need to convey that Danamon has acted in accordance to its roles and responsibility as the security agent which was appointed by Bank of New York Mellon," she said in the statement.
In June 2007, Red Dragon, a Singapore special purpose vehicle controlled by the Jiaravanon family, issued the $200 million, 2 percent secured exchangeable bonds due 2010 to a group of international investors.
At the time, Red Dragon owned 11.9 percent of CP Prima and pledged that CP Prima stake against the bond. Three other entities connected to the Jiaravanon family also pledged CP Prima shares for the bond offering.
The entities -- SHS, Regent Central, and Charm Easy -- owned a combined 58.4 percent of CP Prima, so the total amount of protection the group was offering on the bond equaled 70.3 percent, according to the court legal documents seen by Reuters.
CP Prima's stock went from 760 rupiah per share in July 2007 to 160 rupiah in Sept. 2008, knocking down the value of the bonds in the process.
What incensed the bondholders was an initiative late last year to embark on a rights offering, or an issue of new stock to existing shareholders that raises money for the company.
Bondholders argued that the rights issue would dilute CP Prima's shareholdings and therefore dilute protection against the Red Dragon bond.
In April 2009, the bondholders fought back, instructing the trustee to accelerate bond payments and to commence enforcement actions over the offshore collateral by seizing funds held by Red Dragon in offshore bank accounts.
Bank of New York declined to comment for the story.
Negotiations to restructure the bonds failed, and on May 12, the lawsuits began to fly.
Red Dragon and Pertiwi also filed claims in England against Bank of New York as Trustee and Bank Danamon as Security Agent -- the two entities acting on behalf of the bondholders, another legal document seen by Reuters showed.
Bank Ekspor Indonesia to sign $210 mln syndicated loan
SINGAPORE -
Bank Ekspor Indonesia will sign a $210 million syndicated loan on Friday to help refinance the Indonesian lender's loan and support future export financing, Bank Mandiri, one of its mandated lead arrangers & bookrunners, said.
Bank Mandiri (BMRI.JK), Indonesia's largest bank by assets, contributed the biggest portion of that syndicated loan by lending $35 million to Bank Ekspor, according to a statement.
A total of 16 banks participated in that syndicated loan, including Bank of Tokyo-Mitsubishi UFJ, Oversea-Chinese Banking Corporation (OCBC.SI) and Krung Thai Bank KTB.BK.
Bank Ekspor Indonesia will sign a $210 million syndicated loan on Friday to help refinance the Indonesian lender's loan and support future export financing, Bank Mandiri, one of its mandated lead arrangers & bookrunners, said.
Bank Mandiri (BMRI.JK), Indonesia's largest bank by assets, contributed the biggest portion of that syndicated loan by lending $35 million to Bank Ekspor, according to a statement.
A total of 16 banks participated in that syndicated loan, including Bank of Tokyo-Mitsubishi UFJ, Oversea-Chinese Banking Corporation (OCBC.SI) and Krung Thai Bank KTB.BK.
Bank Ekspor Indonesia to sign $210 mln syndicated loan
SINGAPORE -
Bank Ekspor Indonesia will sign a $210 million syndicated loan on Friday to help refinance the Indonesian lender's loan and support future export financing, Bank Mandiri, one of its mandated lead arrangers & bookrunners, said.
Bank Mandiri (BMRI.JK), Indonesia's largest bank by assets, contributed the biggest portion of that syndicated loan by lending $35 million to Bank Ekspor, according to a statement.
A total of 16 banks participated in that syndicated loan, including Bank of Tokyo-Mitsubishi UFJ, Oversea-Chinese Banking Corporation (OCBC.SI) and Krung Thai Bank KTB.BK.
Bank Ekspor Indonesia will sign a $210 million syndicated loan on Friday to help refinance the Indonesian lender's loan and support future export financing, Bank Mandiri, one of its mandated lead arrangers & bookrunners, said.
Bank Mandiri (BMRI.JK), Indonesia's largest bank by assets, contributed the biggest portion of that syndicated loan by lending $35 million to Bank Ekspor, according to a statement.
A total of 16 banks participated in that syndicated loan, including Bank of Tokyo-Mitsubishi UFJ, Oversea-Chinese Banking Corporation (OCBC.SI) and Krung Thai Bank KTB.BK.
Indonesia's Bank Panin plans 1.5 trln rph bond issue
JAKARTA -
Indonesian lender, PT Bank Panin Tbk (PNBN.JK), plans to raise about 1.5 trillion rupiah ($148 million) from a bond issue in the third quarter, its corporate secretary said on Thursday.
The bank, ranked ninth by assets among Indonesia's lenders and partly owned by Australia and New Zealand Banking Group (ANZ.AX), has appointed Indopremier Securities, Bahana Securities, Danareksa Sekuritas and Evergreen Capital as underwriters.
"We're still monitoring the market, such as demand and interest rates, so we cannot say the exact date yet," Jasman Ginting told Reuters. Shares of Bank Panin closed at 680 rupiah, little changed on the day as the index .JKSE ended up just 0.03 percent. ($1 = 10,140 rupiah)
Indonesian lender, PT Bank Panin Tbk (PNBN.JK), plans to raise about 1.5 trillion rupiah ($148 million) from a bond issue in the third quarter, its corporate secretary said on Thursday.
The bank, ranked ninth by assets among Indonesia's lenders and partly owned by Australia and New Zealand Banking Group (ANZ.AX), has appointed Indopremier Securities, Bahana Securities, Danareksa Sekuritas and Evergreen Capital as underwriters.
"We're still monitoring the market, such as demand and interest rates, so we cannot say the exact date yet," Jasman Ginting told Reuters. Shares of Bank Panin closed at 680 rupiah, little changed on the day as the index .JKSE ended up just 0.03 percent. ($1 = 10,140 rupiah)
Wednesday, July 8, 2009
Indonesia's Money Market Flooded by Foreign Fund
In the second quarter of 2009, foreign fund flow to Bank Indonesia Certificate (SBI) and the state commercial paper (SUN) reached 406.02 million U.S. dollars and 748.33 million dollars respectively, the central Bank Indonesia said.
In the second quarter of 2009, foreign fund flow to Bank Indonesia Certificate (SBI) and the state commercial paper (SUN) reached 406.02 million U.S. dollars and 748.33 million dollars respectively, the central Bank Indonesia said.
According to Tuesday's Investor Indonesia Daily, with those jumps, foreign fund position in SBI and SUN stood at 2.03 billion dollars and 8.50 billion dollars, respectively.
Meanwhile, in capital market, foreign fund recorded net buy of 501.63 million dollars in the second quarter.
The huge amount of the foreign fund flow was able to balance between demand and offer of foreign exchange in the domestic market, said the paper.
In the second quarter of 2009, foreign fund flow stood at 3.18 billion dollars while demand from domestic players was only 1.67 billion dollars.
The percentage of the foreign fund was 37 percent in share portfolios, 20.9 percent in SBI and 18.9 percent in the government bonds.
Kostaman Thayib, the Director of PT Bank Mega Tbk, said that positive economic growth in Indonesia attracted foreign investors for a while, apart of effect of decreasing risk perception.
In the second quarter of 2009, foreign fund flow to Bank Indonesia Certificate (SBI) and the state commercial paper (SUN) reached 406.02 million U.S. dollars and 748.33 million dollars respectively, the central Bank Indonesia said.
According to Tuesday's Investor Indonesia Daily, with those jumps, foreign fund position in SBI and SUN stood at 2.03 billion dollars and 8.50 billion dollars, respectively.
Meanwhile, in capital market, foreign fund recorded net buy of 501.63 million dollars in the second quarter.
The huge amount of the foreign fund flow was able to balance between demand and offer of foreign exchange in the domestic market, said the paper.
In the second quarter of 2009, foreign fund flow stood at 3.18 billion dollars while demand from domestic players was only 1.67 billion dollars.
The percentage of the foreign fund was 37 percent in share portfolios, 20.9 percent in SBI and 18.9 percent in the government bonds.
Kostaman Thayib, the Director of PT Bank Mega Tbk, said that positive economic growth in Indonesia attracted foreign investors for a while, apart of effect of decreasing risk perception.
Thursday, July 2, 2009
BRI Disbursed Rp 20 Trillion to State Companies
JAKARTA- Bank Rakyat Indonesia (BRI) said it disbursed Rp20 trillion out of Rp30 trillion (US$3 billion) in new credits approved by the state lender to other state companies in the first half of this year.
Sofyan Basir the president of the state lender said demand for credits was weak and the bank management is more selective in disbursing new credits.
Sofyan said BRI has pledged new credits to 60 borrowers among state companies this year including those operating in telecommunications, electricity, and cement sectors.
He said all of the credits are syndicated involving mainly other major state banks like Bank Negara Indonesia and Bank Mandiri.
Sofyan Basir the president of the state lender said demand for credits was weak and the bank management is more selective in disbursing new credits.
Sofyan said BRI has pledged new credits to 60 borrowers among state companies this year including those operating in telecommunications, electricity, and cement sectors.
He said all of the credits are syndicated involving mainly other major state banks like Bank Negara Indonesia and Bank Mandiri.
Wednesday, July 1, 2009
Maybank may boost BII asset size
MALAYAN Banking Bhd, Malaysia’s largest bank by assets, said it’s prepared to inject more funds into PT Bank Internasional Indonesia, aiming to double the unit’s asset size within five years.
“If we wish to double or triple the asset size, clearly we need to put in a bit more capital,” said Abdul Wahid Omar, chief executive officer of Maybank, as the Kuala Lumpur-based lender is known.
“We will be looking at doubling within five years.”
Any additional capital for Bank Internasional, which Maybank bought last year, would be financed by Maybank’s internally generated funds, Abdul Wahid said in the interview today.
Maybank spent more than US$2 billion buying bank stakes in Indonesia, Pakistan and Vietnam last year, seeking growth overseas amid increased competition.
Malaysian banks are now offering loans at rates that are “below the economic level,” Abdul Wahid said today. - Bloomberg
“If we wish to double or triple the asset size, clearly we need to put in a bit more capital,” said Abdul Wahid Omar, chief executive officer of Maybank, as the Kuala Lumpur-based lender is known.
“We will be looking at doubling within five years.”
Any additional capital for Bank Internasional, which Maybank bought last year, would be financed by Maybank’s internally generated funds, Abdul Wahid said in the interview today.
Maybank spent more than US$2 billion buying bank stakes in Indonesia, Pakistan and Vietnam last year, seeking growth overseas amid increased competition.
Malaysian banks are now offering loans at rates that are “below the economic level,” Abdul Wahid said today. - Bloomberg
INDONESIA GIVES STATE BANK OF INDIA FOREIGN EXCHANGE STATUS
JAKARTA, Jun 30, 2009 - Bank Indonesia has finally granted the foreign exchange bank license to State Bank of India (SBI) Indonesia to facilitate trade between the two countries.
SBI Indonesia has to wait for two years to secure the license , said Rajive Saran, the president of the Indonesian unit of State Bank of India.
With the license, the bank could take a significant role in facilitating the bilateral trade , which is valued at around US$10 billion a year, Saran said.
Finance director of SBI Indonesia Sathyamurthy said trade between the two countries have grown fast but payment service is not yet efficient and takes a long time by payment agent.
Indonesia has continued to chalk up surplus in trade with India in the past five years.
SBI Indonesia has to wait for two years to secure the license , said Rajive Saran, the president of the Indonesian unit of State Bank of India.
With the license, the bank could take a significant role in facilitating the bilateral trade , which is valued at around US$10 billion a year, Saran said.
Finance director of SBI Indonesia Sathyamurthy said trade between the two countries have grown fast but payment service is not yet efficient and takes a long time by payment agent.
Indonesia has continued to chalk up surplus in trade with India in the past five years.
State Bank of India to Finance Indonesia-India Trade
JAKARTA -- State Bank of India, India's largest lender by assets, will serve as a foreign exchange bank to facilitate trade between India and Indonesia, handling about $350 million initially, an executive at the bank said Tuesday.
Subramanian Sathyamurthy, operations director at local unit PT SBI Indonesia, told Dow Jones Newswires that trade between India and Indonesia last year was worth $10 billion.
Given that SBI handles about 35% of total foreign exchange business in India, its potential market share share of bilateral trade between the South and Southeast Asian nations could eventually be $3.5 billion annually, Mr. Sathyamurthy said.
"Of this $3.5 billion, we aim to garner about 10% initially, which is a decent sum to start with," he said.
Mr. Sathyamurthy said SBI Indonesia previously functioned as a local bank but was given a license this week by Indonesian regulators to operate as a foreign exchange bank. The lender has been seeking such a license for several years.
India is a major importer of Indonesian export goods such as crude palm oil and coal. However, many export transactions are conducted via third parties in Singapore, as there are few local financial houses that specialize in trade and services between the two countries.
Officials at SBI Indonesia, which until last month was named PT Bank IndoMonex, have told local media previously that the bank would be able to offer trade finance and advisory services to Indian companies doing business in Indonesia, as well as remittance services to the Indian expatriate community here, which numbers about 10,000.
SBI owns 76% of SBI Indonesia.
SBI Indonesia has 10 branches in major Indonesian cities, and has said it plans to open more branches in years to come.
Mr. Sathyamurthy declined to comment on a media report Tuesday that said SBI is considering buying another bank in Indonesia, saying he had no knowledge of the matter.
India's The Economic Times reported that SBI is in talks with Indonesia's PT Bank Eksekutif Internasional to acquire a majority stake in it as a strategic investment.
Bank Eksekutif has 13 branches in Indonesia and 491 employees, the report said.
Subramanian Sathyamurthy, operations director at local unit PT SBI Indonesia, told Dow Jones Newswires that trade between India and Indonesia last year was worth $10 billion.
Given that SBI handles about 35% of total foreign exchange business in India, its potential market share share of bilateral trade between the South and Southeast Asian nations could eventually be $3.5 billion annually, Mr. Sathyamurthy said.
"Of this $3.5 billion, we aim to garner about 10% initially, which is a decent sum to start with," he said.
Mr. Sathyamurthy said SBI Indonesia previously functioned as a local bank but was given a license this week by Indonesian regulators to operate as a foreign exchange bank. The lender has been seeking such a license for several years.
India is a major importer of Indonesian export goods such as crude palm oil and coal. However, many export transactions are conducted via third parties in Singapore, as there are few local financial houses that specialize in trade and services between the two countries.
Officials at SBI Indonesia, which until last month was named PT Bank IndoMonex, have told local media previously that the bank would be able to offer trade finance and advisory services to Indian companies doing business in Indonesia, as well as remittance services to the Indian expatriate community here, which numbers about 10,000.
SBI owns 76% of SBI Indonesia.
SBI Indonesia has 10 branches in major Indonesian cities, and has said it plans to open more branches in years to come.
Mr. Sathyamurthy declined to comment on a media report Tuesday that said SBI is considering buying another bank in Indonesia, saying he had no knowledge of the matter.
India's The Economic Times reported that SBI is in talks with Indonesia's PT Bank Eksekutif Internasional to acquire a majority stake in it as a strategic investment.
Bank Eksekutif has 13 branches in Indonesia and 491 employees, the report said.
Monday, June 22, 2009
BANK RAKYAT INDONESIA TO ISSUE BONDS
ANYER, West Java-
PT Bank Rakyat Indonesia (BRI) plans to issue bonds worth no less than Rp2 trillion (US$194 million) in the second semester this year to increase its capital and credit distribution.
"We have already made preparations for it," the bank`s head of planning and strategy division, Irianto, said in a press gathering here on Saturday.
He said he still had yet to wait for the financial report for the first semester at the end of June before implementing the plan.
He said it would take around one and a half months or two months to audit the first semester`s financial report and therefore the issuance of the bonds would only be done after July.
Irianto said no decision had been made yet on whether the bond would mature in five or ten years.
He said BRI had actually planned to issue bonds several semesters before but because economic conditions were not supportive the plan had been delayed.
The bank`s head of investor relationship desk, Haru Koesmahargiyo, said BRI until March 2009 still performed well growing above the average national banks.
"BRI`s assets grew 24.78 percent, third party funds up 27.23 percent and credit rose 39.51 percent while profit increased 22.02 percent," he said.
Haru said the value of BRI`s asssets reached Rp250.14 trillion while its outstanding credit Rp165.23 trillion, third-party funds Rp203.11 trillion and net profit Rp1.72 trillion.
The bank`s capital adequacy ratio was recorded at 14.91 percent while its non-performing loan 3.24 percent and its loan to deposit ratio at 81.35 percent.
PT Bank Rakyat Indonesia (BRI) plans to issue bonds worth no less than Rp2 trillion (US$194 million) in the second semester this year to increase its capital and credit distribution.
"We have already made preparations for it," the bank`s head of planning and strategy division, Irianto, said in a press gathering here on Saturday.
He said he still had yet to wait for the financial report for the first semester at the end of June before implementing the plan.
He said it would take around one and a half months or two months to audit the first semester`s financial report and therefore the issuance of the bonds would only be done after July.
Irianto said no decision had been made yet on whether the bond would mature in five or ten years.
He said BRI had actually planned to issue bonds several semesters before but because economic conditions were not supportive the plan had been delayed.
The bank`s head of investor relationship desk, Haru Koesmahargiyo, said BRI until March 2009 still performed well growing above the average national banks.
"BRI`s assets grew 24.78 percent, third party funds up 27.23 percent and credit rose 39.51 percent while profit increased 22.02 percent," he said.
Haru said the value of BRI`s asssets reached Rp250.14 trillion while its outstanding credit Rp165.23 trillion, third-party funds Rp203.11 trillion and net profit Rp1.72 trillion.
The bank`s capital adequacy ratio was recorded at 14.91 percent while its non-performing loan 3.24 percent and its loan to deposit ratio at 81.35 percent.
Friday, June 12, 2009
Indonesia's BRI Syariah sees doubling in assets
JAKARTA -
Indonesian Islamic lender PT Bank Rakyat Indonesia Syariah (BRI Syariah) expects its assets to double to 3 trillion rupiah ($297.6 million) by the end of the year, the bank's top official told to reporters.
Indonesia is seen as a prime market for Islamic finance with around 85 percent of its population of 226 million people following Islam, although growth has been slow.
The central bank in January forecast that sharia banks would account for 3 percent of total banking industry assets this year, compared to just over 2 percent of the national banking assets in 2008, far lower than its neighbour Malaysia and Singapore.
"Our assets are at about 1.5 trillion rupiah and we hope they will increase to 3 trillion rupiah by the end of the year," chief director Ventje Raharjo said late on Thursday.
The world's largest populated Muslim country has been lagging in developing sharia banking, due to factors such as tax regulations and a lack of expertise.
The bank had also secured an additional 500 billion rupiah of funds to double its working capital to 1 trillion rupiah.
"It will be used for investment, strengthening the infrastructure and expanding business," Raharjo said.
He added the bank would focus more on low- and middle-income segments, in line with its parent company, PT Bank Rakyat Indonesia Tbk (BBRI.JK).
Most Islamic-based banks and sharia banking divisions in the country have provided financing for small- and medium- sized enterprises, focusing on agriculture, manufacturing, and trading sectors as well as business services.
Indonesia has five sharia banks and 25 commercial banks with sharia units, as of April 2009, central bank data showed. From Reuters, 12th June 2009
Indonesian Islamic lender PT Bank Rakyat Indonesia Syariah (BRI Syariah) expects its assets to double to 3 trillion rupiah ($297.6 million) by the end of the year, the bank's top official told to reporters.
Indonesia is seen as a prime market for Islamic finance with around 85 percent of its population of 226 million people following Islam, although growth has been slow.
The central bank in January forecast that sharia banks would account for 3 percent of total banking industry assets this year, compared to just over 2 percent of the national banking assets in 2008, far lower than its neighbour Malaysia and Singapore.
"Our assets are at about 1.5 trillion rupiah and we hope they will increase to 3 trillion rupiah by the end of the year," chief director Ventje Raharjo said late on Thursday.
The world's largest populated Muslim country has been lagging in developing sharia banking, due to factors such as tax regulations and a lack of expertise.
The bank had also secured an additional 500 billion rupiah of funds to double its working capital to 1 trillion rupiah.
"It will be used for investment, strengthening the infrastructure and expanding business," Raharjo said.
He added the bank would focus more on low- and middle-income segments, in line with its parent company, PT Bank Rakyat Indonesia Tbk (BBRI.JK).
Most Islamic-based banks and sharia banking divisions in the country have provided financing for small- and medium- sized enterprises, focusing on agriculture, manufacturing, and trading sectors as well as business services.
Indonesia has five sharia banks and 25 commercial banks with sharia units, as of April 2009, central bank data showed. From Reuters, 12th June 2009
Indonesia's Bakrie says to buy back Bumi shares
JAKARTA -
Indonesia's PT Bakrie & Brothers Tbk (BNBR.JK) plans to buy back shares in coal miner PT Bumi Resources (BUMI.JK) and property firm PT Bakrieland Development Tbk (ELTY.JK), a director said on Thursday.
The diversified group, whose interests range from plantations to telecoms and coal, struck a number of deals, including sale stakes, late last year to help repay around $1.2 billion in debt.
The politically connected group, controlled by the family of Indonesia's chief welfare minister Aburizal Barkie, has said its debts have been halved to the equivalent of $627 million. [ID:nJAK414315]
Asked about a report that the firm planned to spend $150 million on buying back shares in Bumi and Bakrieland, Bakrie & Brothers' Finance Director Yuanita Rohali said the firm had an option to buy back shares in the fourth quarter.
"We have the intention to exercise the options on their exercise date in the fourth quarter," Rohali told Reuters via email, adding it planned to buy around a 6.4 percent stake in Bakrieland and around a 4.2 percent stake in Bumi.
"We're still reviewing alternatives for the source of funds," Rohali said.
Shares of Bakrie & Brothers gained 3.3 percent on Thursday to close at 94 rupiah, while Bumi shares fell 1.1 percent to 2,225 rupiah and Bakrieland Development fell 3 percent to 315 rupiah.
The Jakarta Composite Index .JKSE fell 0.91 percent. From Reuters, 11th June 2009
Indonesia's PT Bakrie & Brothers Tbk (BNBR.JK) plans to buy back shares in coal miner PT Bumi Resources (BUMI.JK) and property firm PT Bakrieland Development Tbk (ELTY.JK), a director said on Thursday.
The diversified group, whose interests range from plantations to telecoms and coal, struck a number of deals, including sale stakes, late last year to help repay around $1.2 billion in debt.
The politically connected group, controlled by the family of Indonesia's chief welfare minister Aburizal Barkie, has said its debts have been halved to the equivalent of $627 million. [ID:nJAK414315]
Asked about a report that the firm planned to spend $150 million on buying back shares in Bumi and Bakrieland, Bakrie & Brothers' Finance Director Yuanita Rohali said the firm had an option to buy back shares in the fourth quarter.
"We have the intention to exercise the options on their exercise date in the fourth quarter," Rohali told Reuters via email, adding it planned to buy around a 6.4 percent stake in Bakrieland and around a 4.2 percent stake in Bumi.
"We're still reviewing alternatives for the source of funds," Rohali said.
Shares of Bakrie & Brothers gained 3.3 percent on Thursday to close at 94 rupiah, while Bumi shares fell 1.1 percent to 2,225 rupiah and Bakrieland Development fell 3 percent to 315 rupiah.
The Jakarta Composite Index .JKSE fell 0.91 percent. From Reuters, 11th June 2009
Northstar-Saratoga preferred for Indonesia's Elnusa
JAKARTA -
A consortium made up of Indonesian private equity firms Northstar Pacific and Saratoga Capital has been named the preferred bidder for a stake in oil services firm PT Elnusa Tbk, the arranger for the deal said.
Plans by contracting firm PT Tri Daya Esta's to divest its 37 percent stake in Elnusa (ELSA.JK) attracted several bidders, including state energy firm Pertamina, which has already has a 41 percent stake in Elnusa.
"Tri Daya Esta will immediately continue to complete the negotiation with Northstar-Saratoga consortium, which has been stated as preferred bidder," PT Bahana Securities said a statement late on Thursday.
Officials from Northstar or Saratoga were not immediately available for comment.
Bahana said the consortium was chosen because it offered a credible business plan and the best offer price, but did not elaborate.
The transaction is expected to be completed within eight to ten weeks.
Elnusa's shares fell 4.9 percent to 385 rupiah as of 0809 GMT, compared to a 0.23 percent fall in the broader market .JKSE. From Reuters, 11th June 2009
A consortium made up of Indonesian private equity firms Northstar Pacific and Saratoga Capital has been named the preferred bidder for a stake in oil services firm PT Elnusa Tbk, the arranger for the deal said.
Plans by contracting firm PT Tri Daya Esta's to divest its 37 percent stake in Elnusa (ELSA.JK) attracted several bidders, including state energy firm Pertamina, which has already has a 41 percent stake in Elnusa.
"Tri Daya Esta will immediately continue to complete the negotiation with Northstar-Saratoga consortium, which has been stated as preferred bidder," PT Bahana Securities said a statement late on Thursday.
Officials from Northstar or Saratoga were not immediately available for comment.
Bahana said the consortium was chosen because it offered a credible business plan and the best offer price, but did not elaborate.
The transaction is expected to be completed within eight to ten weeks.
Elnusa's shares fell 4.9 percent to 385 rupiah as of 0809 GMT, compared to a 0.23 percent fall in the broader market .JKSE. From Reuters, 11th June 2009
Subscribe to:
Posts (Atom)
