INDONESIA - REGULATIONS - Bank Indonesia’s Ownership Rule May Speed Up Mergers

www.thejakartaglobe.com - Fitch Ratings says the central bank’s new rule on bank ownership will likely expedite banking consolidations but will pose challenges for smaller lenders.

A day after Bank Indonesia announced its new rule to cap the ownership of banks to 40 percent from 99 percent, Fitch said in a report on Thursday that “the risk of failing to maintain the Bank Indonesia criteria may be more pronounced at small- to medium-sized banks facing undue business pressure.”

“This is notably because of a concentrated shareholding structure, especially family-owned, which has been cited as one factor behind bank failures in Indonesia in the past,” the rating agency wrote.

The rule is expected to set a clear platform for future bank acquisitions, as Indonesia has been coaxing its 120 commercials lenders to consolidate through mergers and acquisitions, hoping to help them better compete with regional peers. (source)

INDONESIA - REGULATIONS - Indonesia's new bank rules may not hit Maybank, CIMB

www.btimes.com.my - KUALA LUMPUR:Indonesia's central bank has issued new rules limiting single ownership in domestic banks at 40 per cent but allows exemptions that could let Malaysia's top two lenders hold on to their controlling stakes in banks there. Bank Indonesia, in a statement on Wednesday, said public-listed financial institutions will be allowed to keep their current ownership structures in Indonesian banks, provided they maintain high levels of corporate governance and financial health, including a tier-1 capital ratio of over six per cent.

From December 2013, those that see their corporate governance and financial health ratings fall to unacceptable levels for three consecutive reporting periods will have to sell their stakes down to the new limit.  (source)

INDONESIA - REGULATONS - Indonesia’s New Bank Ownership Rules Leave Door Open for DBS Deal

www.thejakartaglobe.com - Jakarta/Singapore. Indonesia’s central bank will cap single ownership of domestic banks at 40 percent under new rules but allow exemptions that could pave the way for DBS Group’s $7.2 billion bid for Bank Danamon to proceed.

The long-awaited regulation announced on Wednesday is aimed at preventing lenders in the fast-growing G20 country falling captive to single interests and ensuring a diverse shareholder base to hold management accountable.

But the rules, which come on the back of ownership restrictions on mining companies, have fueled concerns Indonesia is becoming tougher on foreign investment.(source)

INDONESIA - REGULATIONS - DBS Indonesia Deal May Dodge New Bank Ownership Rules

www.thejakartaglobe.com - The gloom surrounding DBS Group’s $7.2 billion bid for Indonesia’s Bank Danamon is giving way to renewed optimism, with signals from the central bank in Jakarta on Tuesday suggesting the Singapore lender’s takeover may just scrape through.

Southeast Asia’s biggest banking takeover bid was thrown into limbo in April, when Bank Indonesia (BI) announced it would not approve the deal to buy its sixth-biggest lender until it had published new regulations to cap ownership stakes in banks.

The central bank says it wants to prevent its lenders falling captive to single interests and ensure they have a diverse shareholder base holding management to account.  (source)

MALAYSIA - BANKING - CIMB takes aim at Goldman, JPMorgan

www.btimes.com.my - CIMB Group Holdings Bhd, Southeast Asia’s top-ranked investment bank over the past three years, is taking aim at a bigger market following its acquisition of some of Royal Bank of Scotland Group Plc’s operations in Asia.

The Malaysian company can now compete with rivals including Goldman Sachs Group Inc and JPMorgan Chase & Co for Asia- Pacific deals, Chief Executive Officer Nazir Razak said in an interview in Kuala Lumpur. CIMB agreed in April to buy most of Edinburgh-based RBS’s investment banking and cash equities businesses in the region for US$142 million.

The acquisition, which initially seemed to be an “audacious” idea, will complete the bank’s operations and help CIMB boost market capitalization to more than RM100 billion (US$31 billion) by 2015, Nazir said. That’s about 75 percent more than its current value. The Kuala Lumpur-based lender also targets becoming one of the top three Southeast Asian banks by assets and return on equity.  (source)

INDONESIA - BANKING - Fitch: Indonesia Foreign Bank Ownership Double-Edged Sword

www.theindonesiatoday.com - Fresh banking capital will be needed to support the ongoing growth of the Indonesian economy, Fitch Ratings says. 
The challenge in broad terms for the local regulator is to oversee the management of the financial system's risks in such a way that it is able to attract new capital to support this growth, while ensuring the accumulation of risk does not ultimately undermine the stability of the overall financial system.
The debate around Indonesian ownership rules is receiving increased attention due to the offer by SINGAPORE's DBS to acquire Bank Danamon. The regulator is widely expected to clarify its position soon. (source)

INDONESIA - REGULATIONS - Maybank, CIMB can breathe a sigh of relief

www.btimes.com.my - CLOSE CALL: Indonesia’s 40pc single ownership restriction to affect only new investors
IT looks like the country's top two banks, Malayan Banking Bhd (Maybank) and CIMB Group, can heave a sigh of relief as they won't be subject to Indonesia's proposed new rules on bank ownership.

Reuters reported late yesterday that the Indonesian central bank planned to limit single ownership in its banks to 40 per cent, but only for new investments.

"This new regulation will only hold for new initiatives, new investments... there will not be a retroactive regulation," Halim Alamsyah, the central bank deputy governor responsible for banking supervision, told analysts on a conference call, the news wire said. (source)

INDONESIA - REGULATIONS - Indonesia Bank Ownership Plans Seen Hitting DBS Buy

www.thejakartaglobe.com -Indonesia’s central bank on Thursday proposed capping single ownership in the country’s banks at 40 percent for new investment, a rule that would scupper a $7.3 billion bid by Singapore’s DBS Group Holdings for Bank Danamon.

Halim Alamsyah, the central bank deputy governor responsible for banking supervision, told analysts on a conference call that its proposal is for individuals or families to only own up to 30 percent of local lenders, while financial institutions would be able to own up to a maximum of 40 percent. (source)

INDONESIA - BANKING - Indonesia ruling may hurt Malaysian banks' earnings

www.btimes.com.my - KUALA LUMPUR: Malaysia's top two banks could be dealt a bigger blow than expected if Indonesia limits the maximum stake a single shareholder can own in its banks to below 50 per cent, as news reports from Jakarta suggested. A Reuters report yesterday said Bank Indonesia was set to announce next month a reduction in the single-shareholder threshold from 99 per cent currently to a level below 50 per cent. It quoted unnamed sources with direct knowledge of the plan.

A Bisnis Indonesia report, also quoting sources, said the central bank planned to limit the ownership in banks to 40 per cent for financial institutions, 30 per cent for non-financial institutions and 20 per cent for individuals. (source)

INDONESIA - BANKING - DBS bid to take over Danamon in limbo

www.thejakartapost.com -A proposed change to Indonesia's bank ownership limits is threatening to dash DBS Group's bid to take over Bank Danamon.

Sources told Reuters that Indonesia's central bank is planning to limit the maximum stake a single shareholder can take in the country's banks to below 50 per cent, down from 99 per cent now.
This would likely scupper DBS' plan to buy a 67.4 per cent stake in Danamon from Temasek Holdings for $9.1 billion.
But some political observers are optimistic that the final policy change will not be so drastic, as senior Cabinet figures are concerned that foreign investors might be turned off by the move.  (source)

INDONESIA - REGULATONS - Indonesia Set to Cap Bank Owners’ Stakes: Sources

www.thejakartaglobe.com -  Singapore/Jakarta. Indonesia’s central bank is set to limit the maximum stake a single shareholder can take in the country’s banks to below 50 percent, a move that could scupper Singapore-based DBS Group’s $7.3 billion bid for Bank Danamon.

DBS’s acquisition plans were thrown into limbo late last month when the Indonesian central bank said it would not approve the deal until it had published a long-awaited set of rules on bank ownership. Bank Indonesia did not disclose details of the rules at the time. (source)

INDONESIA - BANKING - Muamalat SALES: Management did not know

www.bisnis.com - JAKARTA: The process of selling shares of the banking entities not included in the bank's business plan submitted to Bank Indonesia because it is not the authority of management.
Andi Buchari, Director of Compliance of PT Bank Muamalat Indonesia Tbk, said the company never included the proposed sale of shares held by existing investors in the bank's business plan.
"[The sale] does not make a business plan, because it's what the business plan contains what should be done by management," he said today is Thursday, April 26, 2012. (source)

INDONESIA - BANKING - BI Delays Approval For DBS Acquisition

www.thejakartaglobe.com - Bank Indonesia will not approve DBS Group Holdings’ $7.3 billion acquisition of local lender Bank Danamon Indonesia until it clarifies foreign-ownership rules for Indonesian banks, the central bank head said on Friday.

Bank Indonesia will issue new bank ownership rules by the end of May before evaluating DBS’s planned takeover, BI Governor Darmin Nasution said.

The new ownership rules, he said, will ban non-financial institutions from owning a majority stake in a local bank, but will be more relaxed toward foreign and local banks owning a majority share.

“They have to wait until we finish it,” Darmin said. “This is for the sake of prudence, not because we are trying to block foreigners.”   (source)

INDONESIA - BANKING - BI to Implement Multiple Lincense to Foreign Banks

www.theindonesiatoday.com - JAKARTA, Indonesia Today - The central bank, Bank Indonesia (BI), plans to implement multiple license to foreign banks operating in Indonesia, Bisnis Indonesia reported this morning.

Muliaman D. Hadad, BI's governor deputy, said the multiple license implementation is inline with other countries' policies that do not give equal access to Indonesian banks for expansion.

He said BI's plan to limit foreign ownership in local banks will not be implemented in the near term as BI must synchronize with the government's regulation.  (source)

INDONESIA - BANKING - Bank Indonesia Uses DBS’s Danamon Bid to Negotiate

www.thejakartaglobe.com - Bank Indonesia will seek talks on reciprocity with Singapore as a condition for the central bank’s approval of DBS Group’s bid to acquire Bank Danamon Indonesia, its deputy governor said.

The central bank wants equal treatment for Indonesian banks to operate in Singapore, deputy governor Halim Alamsyah said in Jakarta on Wednesday.

Singapore-based DBS offered to buy Jakarta-based Danamon for about $7.2 billion on April 2 in the biggest takeover by a lender in Southeast Asia. Acquiring Indonesia’s sixth-largest bank by assets will help DBS branch out from Singapore and Hong Kong to tap an economy that grew last year at the fastest pace since before the Asian financial crisis. (source)

INDONESIA - BANKING - DBS Told 80% Is Cap for Indonesia's Bank Danamon

www.thejakartaglobe.com - DBS Group Holdings, Southeast Asia’s largest bank, must sell shares of Bank Danamon Indonesia back to the public if it owns more than 80 percent of the lender after a takeover, according to the Indonesian bourse.

DBS offered to buy Jakarta-based Danamon for about $7.2 billion on April 2 in the biggest takeover by a Southeast Asian lender.

The bank would pay Singapore’s Temasek Holdings Rp 45.2 trillion ($4.9 billion) in new shares for its 67 percent stake and buy the remaining stock from other shareholders for Rp 21.2 trillion in cash.  (source)

INDONESIA - RATINGS - Bank Danamon Indonesia Tbk. outlook positive

www.pefindo.com - PEFINDO puts Positive Outlook to PT Bank Danamon Indonesia Tbk. (BDMN or the Bank) and to PT Adira Dinamika Multi Finance Tbk (ADMF or the Company), the automotive financing subsidiary of BDMN, due to the potential improvement in the Bank’s and the Company’s businesses and financial profiles as a result of BDMN’s shares acquired by DBS Group of Singapore. The acquisition would eventually support BDMN and ADMF in creating a stronger presence in Indonesian banking and financing industry, respectively. It is also expected to strengthen BDMN and ADMF funding franchise.  (source)

INDONESIA - BANKING - Danamon Announces Sale of Shares by FFH to DBS (press release)

www.danamon.co.id - press release - PT Bank Danamon Indonesia, Tbk, (‘Danamon’ or the “Company”) has been informed by Fullerton Financial Holdings Pte. Ltd. (“FFH”), that it has entered into a share purchase agreement with DBS Group Holdings (“DBS”) to sell its interest in the whole of the issued share capital of Asia Financial (Indonesia) Pte. Ltd. (“AFI”) to DBS. AFI holds approximately 67.37% of the total issued shares of the Company. The transaction is subject to the approvals, among others, of DBS shareholders and regulators, including Bank Indonesia.

Danamon shareholders should refer to the DBS announcement dated 2 April 2012 that DBS will launch a Mandatory Tender Offer (MTO) to acquire the remaining listed shares from the other Shareholders of Danamon for a cash offer price of IDR 7,000, - per share. (source)

INDONESIA - BANKING - House urged to intervene in DBS’s plan to acquire Danamon

www.thejakartapost.com - Golkar Party lawmaker Lili Asdjudiredja has called on the House of Representatives to urge Bank Indonesia and the government to prevent Singaporean DBS Bank from acquiring 99 percent of Bank Danamon’s shares as it would create a banking monopoly.

Both banks are owned by Temasek Holdings, the Singaporean sovereign wealth fund fully controlled by the island-city government.

“Even if the deal on Danamon’s acquisition has already been made, it must be annulled because it will affect Indonesia’s banking sector and Danamon’s domestic priority customers,” he said.  (source)

INDONESIA - BANKING - DBS may see Danamon bid delayed

www.thejakartapost.com - Regulators may use DBS Bank's bid for Indonesia's Bank Danamon as a bargaining chip and delay approval until Singapore agrees to offer reciprocal access to its banking sector.

Bank Indonesia (BI) governor Darmin Nasution and his deputy Muliaman Hadad said on Wednesday that they wanted to use DBS' bid to acquire the Indonesian bank, in which Temasek Holdings has a majority stake, to start negotiations on the matter.

If it goes through, the $9.1 billion acquisition, DBS' largest ever, will propel the Singapore bank to being the No. 5 lender in Indonesia, one of the hottest emerging markets.  (source)