SBI buys Indonesian bank

State Bank of India (SBI) has acquired a majority stake of 76 per cent plus management control in an Indonesian Bank — PT Bank IndoMone...

State Bank of India (SBI) has acquired a majority stake of 76 per cent plus management control in an Indonesian Bank — PT Bank IndoMonex, subject to regulatory approvals.

PT Bank IndoMonex is a closely-held entity — a small profitable bank having a total seven offices (branches and sub-branches) located in Jakarta, Bandung and Surabaya. The bank is largely in the business of trade finance and retail banking, including home loans, auto loans, consumer loans.

SBI chairman AK Purwar said the acquisition was made to gain an entry into Indonesia. “East Asia has had historical links with India and has been viewed with interest by SBI. With the proposed acquisition, SBI would increase its footfall in the Asean region where we are already present in Singapore. SBI has developed strong skills in various aspects of banking which would be of relevance to the Indonesian market. I expect that this step would benefit not only the resident Indian community but would facilitate trade and investment and also provide a platform for us to participate in the growth and prosperity of a friendly country” Purwar added.

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Meanwhile, sources close to the development revealed that SBI has notched up a good deal. “The cost of setting up a new banking operation in Indonesia is $300 million. However, our acquisition price is far lower, so we have made a good deal.”

This will be SBI’s third overseas acquisition this year after Indian Ocean International Bank, Mauritius and Giro Commercial Bank Ltd, Kenya.

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