Mandiri Looks to Acquire Other Banks

Jakarta Globe & ID/Agustiyanti

Bank Mandiri, the country’s largest lender by assets, is set to acquire local lenders with assets of at least Rp 10 trillion ($1.1 billion), a top executive says.

“We are only interested in banks with assets of at least Rp 10 trillion or more,” Zulkifli Zaini, president director of Bank Mandiri, said on Thursday.

Bank Indonesia has been coaxing the country’s commercial lenders to consolidate by merger or acquisition. The consolidation is intended help local banks be more competitive in the regional and global banking industry.

Bank Mandiri, with assets of Rp 551 trillion at the end of 2011, is scouting the market now, Zulkifli said without elaborating.

He did say, however, that the lender was waiting for the central bank to change some of the banking regulations, including the single-presence policy. The single presence policy, imposed in 2006, stipulates that a single bank owner cannot have more than a 25 percent share in another Indonesian bank. Any shareholder who maintains a controlling interest in more than one bank will be required to merge them.

The policy follows a trend successfully implemented in other Asian countries that sought to encourage consolidation in often-fragmented markets. In 2000, Malaysia used a similar strategy to reduce its number of banks from 54 to 10.