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Malaysian bank's plan to acquire Indonesian lender hits a wall

Publication Date : 27-06-2014

 

RHB Banking Group, Malaysia’s fourth-largest financial services group, may be forced to withdraw its plan to acquire Indonesia’s publicly listed lender Bank Mestika Dharma (BBMD) due to an unsolved “reciprocity” issue between the countries’ financial regulators.

Nelson Tampubolon, the Financial Services Authority’s (OJK) commissioner in charge of the banking sector, said on Thursday that Indonesia's OJK had yet to approve the planned acquisition.

The conditional agreement between the RHB and OJK is slated to expire by the end of this month.

Nelson added that the OJK would first like to explore the possibility of providing wider opportunities for Indonesian banks to expand overseas, something that could be realized through a memorandum of understanding (MoU) between the OJK and its Malaysian counterpart, Bank Negara Malaysia.

“However, we have not reached any agreement regarding the MoU. We want to make sure that both countries will get equal benefits. We don’t want to be the only one giving opportunities to them,” he said.

As previously reported, Malaysia's RHB had expressed interest in acquiring up to 40 per cent of Mestika, which is based in Medan, North Sumatra. The takeover is reportedly worth 651 million ringgit (US$202.2 million).

Currently, Mestika is 89.4 per cent owned by PT Mestika Benua Mas, 10.5 per cent owned by the public and the rest by other minority shareholders.

Mestika president director Achmad Suherman Kartasasmita said that the possible cancellation would not affect the bank’s business.

 

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