Should Investors Worried About New Bank Ownership Rules?

Indonesia will issue new rules on bank ownership next month that may jeopardize a US$7.3 billion (RM22 billion) bid by Singapore's DBS Group to buy a local lender, the latest policy shift to worry investors.

Indonesia's central bank first proposed rules to cap bank ownership last year and temporarily barred takeovers in the sector before the DBS bid to buy Bank Danamon this month stoked nationalist opposition by anxious local rivals.

The bank said it will review plans to acquire all of Danamon after the new rules are issued in late May.

The takeover, if allowed, will be Indonesia's largest foreign takeover and Asia's fourth-biggest banking deal.

"This will have a negative impact in the short term on Indonesian banking stocks as well as M&A (merger and acquisition) deals in that sector," said Winston Sual, chief executive of Jakarta-based PT Panin Asset Management.

Central bank governor Darmin Nasution said the rules will still allow investors to have majority ownership in Indonesian banks. Indonesia currently allows foreigners to own up to 99 per cent.

The central bank previously said it wants equal access for Indonesian lenders to expand in Singapore and getting that will be a factor in its decision on whether to approve the DBS move to buy Danamon from Singapore state investor Temasek.

Some Indonesian bankers have said they would try to block the DBS deal and were considering a media campaign targeting public opinion in the hope of influencing politicians. source: BTimes

Related Posts:

9 Responses to "Should Investors Worried About New Bank Ownership Rules?"

  1. This is informative enough to make the people aware of what is happening to the economy today. I am glad to have this and will share to other to be aware of the political and economy status.

  2. Thank you for educating us in this sector of our economic system. This is such an informative topic worth reading.

  3. Economic is a complex system. Few are knowledgeable of this actually works. Anyway I want to thank you for posting such informative blog. Keep up the good work.

  4. Very informative post! Thanks you for sharing us an informative article about this new rules in bank ownership. Keep posting!

  5. Surely, the implementation of this new banking rule has also its positive impact to the banking system. Its disadvantages is only short term and it can be regained once it is fully implemented.

  6. It is important that we are knowledgeable with the new rules in bank ownership. Thank you for sharing.

  7. I believe that discussing things about the economy is one of the most complicated things to deal with. Good thing there is such a post like this to give awareness to the people. What's complicated about the economy is that it keeps on changing- keeps on adjusting in order to maintain balance. This can of course be both a good thing and a bad thing, depending on how people perceive it and on the current status of a country's economy. This is such a great post for information purposes.

  8. Every rule has been formulated carefully by people who have deep knowledge in that field but this rule will be criticized whether we like it or not but we should be positive about this. This will help the policy makers to make necessary actions. It has pros and cons and we have to weigh both sides of the equation for the betterment of all parties.

  9. As individual, it is our responsibility to know banks rules and procedures so that we will know what to do in a given situation. By the way, thank you for posting this informative blog.


This Indonesia Today News blog is now dofollow. Please do not hesitate to state your comment here. Please do not add any links on your comment. You can still use your keyword as your name.