Govt mulls Danareksa as 'parent' for state banks

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 02/12/2008 11:15 AM  |  Business

The government is considering state-owned investment management company PT Danareksa to be a holding company for banks which the government own a majority stake in, a minister says.

"We are still considering some options. One of them is to turn Danareksa into a holding company," State Minister for State Enterprises Sofyan Djalil said Monday.

Under the central bank's single presence policy, an investor, either from the public or private sectors, is not allowed to own a majority stake in more than one bank. Those controlling stakes in more than one bank must merge their banks, conduct an acquisition or establish a holding company at the latest by 2010.

The government has a 56 percent share in Bank Rakyat Indonesia (BRI), a 67 percent share in Bank Mandiri, a 76 percent share in Bank Negara Indonesia (BNI) and is the sole owner of Bank Tabungan Negara (BTN).

The four banks have total assets of Rp 658.5 trillion (US$71.23 billion), or 35.6 percent of the country's total banking assets.

Sofyan said that to comply with the central bank's policy, the government was considering turning Danareksa into a makeshift development bank and holding company for state banks. However, he said the decision was not yet final.

"We may instead establish a development bank, like the KfW (Bankengruppe) in Germany, or like development banks in Japan and New Zealand," he said.

KfW is a German government-owned development bank formed after World War II to support the country's economy. Its name originates from Kreditanstalt f

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