ICBC launches foray into Indonesian banking

ICBC launches foray into Indonesian banking

THE Industrial and Commercial Bank of China has signed an agreement to acquire a 90 percent stake in Indonesian lender Bank Halim.

The remaining 10 percent will continue to be held by shareholders of Bank Halim, but ICBC has an option to buy the balance in three years, the Chinese bank said on its Website. The purchase price was not revealed.

The deal represents ICBC’s first takeover of a foreign bank, and it is also the first time for the bank to enter an overseas market via an acquisition.

The purchase is expected to produce valuable experience to help ICBC expand in the international financial markets, the Website statement said.

The two banks are now awaiting permission from their regulatory authorities before they can finalize the deal.

The agreement follows ICBC’s October 27 simultaneous listings on the Shanghai and Hong Kong stock exchanges, registering the world’s biggest initial public offering by raising US$21.9 billion. The ICBC share sale surpassed the US$18.4 billion raised by NTT DoCoMo Inc in 1998.

ICBC’s total assets exceed seven trillion yuan (US$897.4 billion), and it has 2.5 million corporate and 150 million individual clients.

The privately held Bank Halim is based in Surabaya, on Indonesia’s main island of Java. It had US$50 million in assets at the end of 2005, a capital adequacy rate of 57.88 percent and a non-performing loan rate of 1.32 percent.