HSBC, Bank of China, MayBank race for BII stake
HSBC, Europe’s biggest bank, Bank of China and Malaysia’s Malayan Banking Bhd have emerged as the final bidders for Singapore state investor Temasek’s stake in Bank Internasional Indonesia (BII), valued at more than $800 million, sources told Reuters on Wednesday.
Temasek TEM.UL, which has stakes in two Indonesian banks, is trying to sell its 42 percent stake in BII BNII.JK, the country’s sixth-biggest lender, to comply with a new central bank rule that bars foreign investors from owning more than one bank in Southeast Asia’s biggest economy. It also owns a controlling stake in Bank Danamon BDMN.JK.
Temasek has until the end of 2010 to comply with Indonesia’s new policy on bank ownership, but banking sources said the deal could happen much earlier. Goldman Sachs (GS.N: Quote, Profile, Research) and Credit Suisse (CSGN.VX: Quote, Profile, Research) are advising Temasek on the deal.
But BII’s valuation is rich — it is trading at 3.3 times its book, higher than Maybank (MBBM.KL: Quote, Profile, Research) at 2.24 times and HSBC (HSBA.L: Quote, Profile, Research) at 1.4, although below that of Bank of China (3988.HK: Quote, Profile, Research) at 3.6 times, Reuters Data shows.
Due diligence was expected to take place for the remainder of March, with a deal possible in mid-April, said one source familiar with the process who declined to be identified given the sensitivity of the matter.
Strong economic growth, bolstered by the global commodities boom, has boosted demand for loans and earnings at Indonesian banks faxless payday advance. Many lenders predict loan growth of 20 percent or more this year.
“Our bullish stance on Indonesian banks is largely premised on the sector’s strong growth and high profitability prospects. Inflation concerns have not derailed our confidence,” said Ismael Pili, a banking analyst at Macquarie Securities in Singapore.
The loan-to-GDP ratio in Indonesia is 21 percent, against South Korea’s 79 percent and Thailand’s 76 percent, he noted.
Filed under: money by Fred