Single presence to be implemented Q3

Central Bank governor Burhanuddin Abdullah confirmed the implementation of single presence policy in Indonesia to be started in third quarter this year in a bid to consolidate the banking sector, Investor Daily reported today.

Under the new policy, an individual or enterprise is not allowed to be the controlling shareholder or beneficiary owner in two or more banks. With that, some banks should merge if the controlling shareholders decides to maintain ownership or should sell the stakes to other parties.

For example, R. Budi Hartono (owner of Djarum Group, ranked second behind PT Gudang Garam Tbk owner Rahman Halim in Forbes rich list) is listed as controlling shareholder at PT Bank Central Asia (BCA) Tbk, PT Bank Haga, and PT Bank Hagakita. BCA is the largest listed private-owned bank in Indonesia where Farindo (a joint venture between Farallon Capital and Djarum Group) controls 51% shares. It's not clear which option Budi Hartono would take.

Bisnis Indonesia reported that some bank owners have responded the plan with merger plans. "There are some who plan to merge their banks," said Rusli Simanjuntak, director at Bank Indonesia. He didn't disclose the names though.

Some bank owners have previously pledged their support and plan to merge under the single presence policy. Panin Group, for example, is ready to merge PT Pan Indonesia Bank Tbk with PT ANZ Panin Bank. Singapore-based OCBC is also considering the merger of its last year acquired PT Bank NISP Tbk with Bank OCBC Indonesia. Another Singapore-based bank UOB would also merge PT Bank Buana Tbk with PT Bank UOB Indonesia.

Meanwhile Temasek Holdings, the beneficiary owner of three banks in Idonesia---PT Bank Danamon Tbk, PT Bank International Indonesia, and PT Bank DBS Indonesia---is yet to respond the possible merger.

Standard Chartered Bank, the owner of wholly owned subsidiary PT Standard Chartered Bank and 31.55% shares in PT Bank Permata, is similar to Temasek. No respond. Malaysia's Khazanah National Berhad, beneficiary owner of Bank Lippo and Bank Niaga, is also tight-lipped on the issue.

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