(MENAFNEditorial)
JAKARTA February 5 2015--Indonesia’s biggest banks among the world’s most profitable are strong enough to face down overseas rivals without the need to merge to cope with Southeast Asia’s economic integration said the head of state lender PT Bank Negara Indonesia.
Indonesian banks can build on their geographical reach within the sprawling archipelago to retain an advantage over new entrants in Southeast Asia’s largest economy President Director Gatot Suwondo said in an interview in Jakarta on Wednesday. Employees at his bank numbering 27000 would resist any merger with PT Bank Mandiri he said.
Indonesia has been looking at consolidating its four state-owned lenders into two to strengthen them ahead of a free-trade economic zone that is due to start this year and will be applicable for the financial industry from 2020. Its financial regulator wants to cut the country’s 119 banks by half in the next decade through mergers or capital injections.
“Top tier banks are ready to face competition when the Asean economic community comes into effect” Suwondo 58 said at his office. “The issue will be with the small banks and there are many of them with little assets in need of capital and that are too small to go public.”
The financial services authority known as the OJK wants banks with capital below 1 trillion rupiah ($79 million) to consolidate to ease its surveillance of the industry Nelson Tampubolon its chief executive said in December.
The discussion on merging state-owned financial institutions is at an early stage and mergers will not happen this year Rini Soemarno minister for state-owned enterprises said in an interview on Jan. 16. The government controls BNI along with Mandiri PT Bank Rakyat Indonesia and PT Bank Tabungan Negara. Read more..
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