The news is seen as reflecting Indonesia’s desire to take control of its banking sector as interest in investing in the populous, natural resources-rich Southeast Asian country grows.
Under the deal, announced on 2 April, DBS Group said it would buy a 67.4% stake in Bank Danamon from an arm of Tamasek Holdings, the Singaporean sovereign wealth fund, which already holds a 29.7% stake in DBS, for S$6.2bn ($5.02bn, £3.1bn), according to Todayonline.com, a news website owned by Singapore’s MediaCorp group, which in turn is owned by Temasek. DBS would then launch a S$2.9bn mandatory cash offer for the Bank Danamon shares it did not yet have.
But on Friday, the Governor of Bank Indonesia, Darmin Nasution, appeared to put the plan on hold, at least temporarily, after he told journalists that new bank ownership rules, to be issued by June at the latest, would ban non-financial foreign institutions from owning a majority share of Indonesian lenders. The new rules would, however, take a more relaxed attitude towards foreign and local banks, he said.
Nasution’s comments are also seen has having placed on hold the proposed acquisitions for two other Indonesian banks by two Malaysian banks, press reports noted.
“They have to wait until we finish it [the new foreign ownership rules],” Darmin was quoted by the Jakarta Globe as saying.
“This is for the sake of prudence, not because we are trying to block foreigners.”
Darmin also told the Globe that he had spoken with the Monetary Authority of Singapore “concerning greater access for Indonesian banks in the city-state”, and added: “after that [is granted], then we can talk [about the acquisition]”.
According to Agence France-Presse, private investors currently may own up to 99% of Indonesian banks, with the result that foreign financial institutions are said to hold 52% of total bank assets in the country.
DBS is Southeast Asia’s largest bank, by assets, while Bank Danamon is Indonesia’s six largest lender. If the deal were to go through as planned, Bank Danamon would, according to Todayonline.com, be merged with DBS-owned PT Bank DBS Indonesia, which would make it Indonesia’s fifth-largest lender.
