Singapore Telecommunications (Singtel) has acquired a 16.26% stake in Indonesian lender PT Bank Fama International.

Singtel’s wholly-owned subsidiary Singtel Alpha Investments paid $34.9m (IDR500bn) for the 2.4 billion new shares issued by the Indonesian bank, the telecom operator said in a stock filing.

The investment in Fama, which is majority owned by a unit of media and technology conglomerate Elang Mahkota Teknologi, is part of Singtel’s efforts to branch out into the banking sector.

Notably, Singtel and Grab Holdings operate a digital banking joint venture (JV) in Singapore. In July 2021, the JV applied for a digital banking licence in Malaysia.

NASDAQ-listed Grab, which is a ride-hailing and food delivery firm, is also a stakeholder in Fama.

In December 2020, the JV secured its banking licence from the Monetary Authority of Singapore (MAS).

In January 2021, Grab raised over $300m in its Series A funding round to expand its fintech business.

The telecom company noted that Indonesia is home to ASEAN’s largest unbanked and underbanked population and that Fama’s digital banking proposition will benefit from the capabilities that the investors bring.

“This latest investment in digital banking is consistent with Singtel’s strategic reset of riding digital growth trends to build sustainable new businesses across Asia, particularly in markets where the Group has a strong presence”, Singtel added.