Three banks on shortlist to buy into BII

HSBC, Bank of China and Malayan Bank (Maybank) have been short-listed to buy Temasek’s 42 per cent stake in Bank Internasional Indonesia (BII), valued at about $850m, sources with knowledge of the deal said on Wednesday.

It is unclear whether this is the final shortlist for BII, or when the sale will be finalised, but it is thought likely to be completed by the end of next month.

Temasek declined to give details beyond saying it had received “several indications of interest” in the stake.

Temasek is selling the stake to comply with Indonesia’s new central bank rule that bars foreign investors from owning more than one bank in south-east Asia’s biggest economy. The policy stipulates that foreigners with stakes in more than one bank have to merge the banks, form a holding company or sell one stake.

The Singapore state investment agency owns 75 per cent of Sorak Financial, which in turn owns 55.8 per cent of BII, Indonesia’s sixth largest bank. Temasek also owns 68.05 per cent of Bank Danamon, the country’s fifth largest bank, which is considered a much better-managed and stronger performer than BII, whose net profit fell 36 per cent.

However, BII shares have soared 15 per cent since Temasek made its announcement to sell on February 25. They closed up 4 per cent at Rp385 on Wednesday, valuing the company at $2.03bn.

Temasek’s consortium paid $380m for its BII stake.

A source in Jakarta said one of the bidders was told in the past two days that a bid of Rp390 per share would not be sufficient.

Analysts say the Chinese are thought to have the deepest pockets but that HSBC might appear most appealing to Indonesia’s central bank, which has to approve the sale.

● Separately, state-owned Bank Mandiri, Indonesia’s largest bank, on Wednesday said net profit in 2007 had risen 79.5 per cent on the previous year to Rp4,347bn ($478m). Bank Central Asia, the second-largest bank, reported its 2007 net profit was Rp4,500bn, up 6 per cent on 2006.

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