www.theindonesiatoday.com - HONG KONG, Indonesia Today - Standard & Poor's Ratings Services said on Tuesday (April 3) that it had revised its outlook on PT Bank Danamon Indonesia Tbk (BDMN). At the same time, it affirmed its 'BB' long-term and 'B' short-term issuer credit ratings on the Indonesia-based bank.
"The outlook revision reflects our expectation that Danamon could benefit from potential parent group support if DBS Group Holdings Ltd. acquires a majority stake in the bank," said Standard & Poor's credit analyst Terry Sham. "We understand that DBS Group plans to integrate the Indonesian banking business of its Singapore-based subsidiary DBS Bank Ltd. into Danamon. This could enhance Danamon's business and risk diversification, in our opinion." (source)
DBS Group has indicated that the proposed acquisition, which is subject to regulators' approval, is likely to be completed in the second half of this year. We understand that DBSGH intends to keep Danamon outside the structure of DBS Bank.
"We are likely to classify Danamon as a strategically important subsidiary of DBS group upon completion of the proposed acquisition. This is because Danamon could significantly contribute to revenue and profit, and the move fits in with DBS group's strategy to be one of the leading banking groups in Asia. The potential for greater strategic importance hinges on the subsidiary's integration into the group, its branding, and financial performance.
"We could upgrade the bank if it becomes a strategically important subsidiary of DBS group," said Mr. Sham. "We could revise the outlook to stable if we no longer believe that the proposed acquisition is likely to happen." (Indonesia Today)
Source: - April 3, 2012
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