Shareholders of Bank Muamalat plan to sell more than 50 per cent of the lender in a deal that may value it at as much as $600 million, one of the people said, declining to be identified because the talks are private. Second-round bids are due in mid- June, the people said. PT Bank Permata, an Indonesian lender 45 per cent owned by Standard Chartered, is bidding for the stake, one person said. (full story - alrroya)
Rising demand for Islamic banking services helped drive the Jakarta Finance Index 52 per cent higher in the past 12 months. Islamic banking assets in Indonesia, Southeast Asia’s biggest economy, grew to 100 trillion rupiah ($11.7 billion) last year from 67trn rupiah at the end of 2009, Mulya Siregar, the head of shariah banking at the central bank, said in January.
Bank Muamalat has almost 400 offices in Indonesia and a branch in Malaysia. The lender plans to quadruple its holdings of shariah-compliant debt this year, Chief Financial Officer Hendiarto said in a February interview. The company had about 20.4trn rupiah of assets as of December and targets asset growth of 50 per cent this year, according to Hendiarto, who goes by one name.
Investors in Bank Muamalat may sell as much as 80 per cent of the lender, according to one person.
Hendiarto declined to comment on bidders for the stake. Spokespeople for Standard Chartered, Oversea-Chinese and Qatar Islamic Bank declined to comment.
Indonesia is the Asia-Pacific regions third-most populous country with about 237 million people, 85 per cent of whom are Muslim, the most of any nation. Demand for banking services that comply with shariah law is increasing by about 15 per cent a year and Islamic assets may reach $1.6trn by 2012, according to the Kuala Lumpur-based Islamic Financial Services Board.
Companies on the 70-stock Jakarta Finance Index trade at an average 2.47 times book value, compared with 1.9 times for Chinese lenders traded in Hong Kong, according to data compiled by Bloomberg.
London-based Standard Chartered got more than half of its pretax profit from the Asia-Pacific region last year, Bloomberg data show. The company hired Sanjeeb Chaudhuri from Citigroup Inc. as head of consumer banking for South Asia, two people with knowledge of the matter said this month.
The UK lender offers Islamic-banking services in Indonesia through its Standard Chartered Saadiq unit, and has 26 branches in the country. It also owns the stake in Bank Permata, a lender with 280 branches in Indonesia, according to Standard Chartered’s annual report.
Qatar Islamic Bank, the country’s biggest shariah-compliant lender, owns stakes in UK, Malaysian and Lebanese lenders and may enter the Indonesian and Turkish markets, acting Chief Executive Officer Ahmad Meshari said in a May 12 interview.
Oversea-Chinese, Singapore’s second-largest lender by market value, merged its two bank subsidiaries in Indonesia this year. Bank OCBC NISP, in which the Singaporean lender has an 85 per cent stake, had assets of 50.15trn rupiah at the end of last year, according to Oversea-Chinese’s annual report.
Bank OCBC NISP opened three Shariah banking branches in Jakarta, Bandung and Surabaya. Together with additions of conventional bank branches, its overall network in the country increased to 409 from 382.
Countries including Turkey, South Africa and Thailand are easing barriers to Islamic finance products to tap rising demand for such services. The world’s Muslim population is expected to increase by about 35 per cent to 2.2 billion by 2030, with Asia accounting for 59 per cent of the total, according to the Pew Research Center.
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