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August 16, 2019

OCBC mulls bid for controlling stake in Indonesian lender Bank Permata

Singaporean lender OCBC is considering a bid for a majority stake in Bank Permata, an Indonesian bank backed by Standard Chartered, Bloomberg reported.

According to the report, OCBC intends to buy the stakes of both Standard Chartered and Astra International.

Standard Chartered and Astra hold a stake of around 44.6% each in Permata.

However, the report stressed that the plans are at an early stage and may or may not materialise.

The deal, if materialised, would result in the creation of Indonesia’s fifth largest lender.

Given that the deal is successful, OCBC may merge Permata with another Indonesian lender Bank OCBC NISP, where OCBC holds a stake of around 85%.

The consolidation is a requirement under Indonesia’s single-presence rule, though the rule is expected to be relaxed soon.

Together, Permata and Bank OCBC NISP manage assets of IDR326 trillion ($23bn).

Earlier this year, Standard Chartered said that its Permata investment is non-core and indicated that it may offload its stake in the Indonesian bank.

Moreover, Indonesia is among the four countries where the British banking group intends to lower costs.

Permata Bank registered a net income of IDR711.4bn in the first half of 2019. This is a significant rise from the previous year figure of IDR288.8bn.

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