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UPDATE 2-Indonesia's Bank Windu says pursuing 'corporate action' when quizzed on CCB talks
June 8, 2015 / 5:17 AM / in 2 years

UPDATE 2-Indonesia's Bank Windu says pursuing 'corporate action' when quizzed on CCB talks

* Bank Windu shares rise 18 pct; hit record

* CCB could bring expertise in infrastructure loans - regulator

* CCB would be exempt from 40 pct cap if merges banks - regulator (Recasts)

By Eveline Danubrata

JAKARTA, June 8 (Reuters) - PT Bank Windu Kentjana International Tbk said on Monday it was pursuing “corporate action” when queried by the bourse about a media report stating it was in acquisition talks with China Construction Bank Corp (CCB) .

Shares of the Indonesian lender rose as much as 18 percent to a record high on the day of the filing, which came after newspaper Kompas cited a financial services official as saying China’s second-largest bank by assets had submitted a proposal to buy Bank Windu and was looking to acquire another.

CCB and the Indonesian official, Deputy Commissioner for Banking Supervision Mulya Siregar, were not available to comment when contacted by Reuters.

An Indonesian bank deal would be rare for a Chinese state-owned lender, and would add to a string of foreign firms buying into a sector enjoying strong net interest margins relative to Southeast Asian peers.

Meanwhile in China, slowing profit growth has sent banks expanding abroad.

“It is true that there is a corporate action in the company’s business plan, but this is not final yet and it still requires some approvals from the relevant regulator,” Bank Windu said.

Foreign banks can own up to 40 percent of an Indonesian lender. A 40 percent stake in Bank Windu would be worth around 776 billion rupiah ($58.02 million) based on current market prices.

When asked on the matter by Reuters, banking supervisor Nelson Tampubolon of the Indonesia Financial Services Authority did not say whether CCB had approached Bank Windu.

However he said CCB could bring expertise in infrastructure loans to a country seeking project funding, and could be exempt from the foreign ownership cap.

“If it (CCB) only acquires one bank, then the 40 percent rule applies,” Tampubolon said in a text message. “But if it buys two and merges them, then the supervisor can give more leeway above 40 percent.”

Indonesia previously granted an exemption last year, allowing Japan’s J Trust Co Ltd to buy nearly 100 percent of troubled Bank Mutiara.

Recent inroads into Indonesia’s banking sector include Shinhan Bank - part of South Korea’s Shinhan Financial Group - receiving regulatory approval in April to buy 40 percent of Bank Metro Express.

In February, an affiliate of Japan’s Sumitomo Corp bought 17.5 percent of PT Bank Tabungan Pensiunan Nasional Tbk for 5.93 trillion rupiah. (Additional reporting by Engen Tham in SHANGHAI; Editing by Christopher Cushing)

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