Foreign Bank Acquisitions

Oct 5th, 2006, in Business & Economy, by

Bank Indonesia says it regards foreign players in the banking market no differently than their local counterparts.

Ahmad Rizal, the head of the Information and Permits department of Bank Indonesia said that many small banks in Indonesia did not have adequate capital, echoing the words of his boss, Bank Indonesia governor Burhanuddin Abdullah, (50 Banks Unsound, 28th September), and should seek mergers with larger banks. Whether the acquiring banks later were foreign or local, he said Bank Indonesia would take no regard, in the interests of stability.

By 2010, he added, the minimal capital level for an Indonesian bank would rise to 100 billion rupiah, about $1,000,000, from 80 billion rupiah in 2007. The level of foreign ownership of Indonesian banks would continue to increase, he said.

Regulators appear to have no objections to the likely acquisition of Bank Halim by ICBC of China, as one example.

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