Rabobank merger creates RI's largest int'l network

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 07/29/2008 10:03 AM  |  Business

In a bid to comply with central bank policy, Rabobank International Indonesia, a local affiliate of Dutch financial giant Rabobank, announced Monday its merger with Hagabank and Bank Hagakita.

Following the merger, the new entity, Rabobank, now has assets worth Rp 10.2 trillion (US$1.12 billion) and 94 branches across the country, making it Indonesia's largest international bank in terms of network coverage.

The bank plans to have 250 branches, mostly outside Java, by 2010.

"With the merger, we are aiming at a lending growth of between 20 percent and 30 percent this year, focusing on corporations and small and medium businesses, as well as consumers," Rabobank International Indonesia president director, Tony D. Costa said.

Costa also said Rabobank would continue to prioritize lending to the food and agribusiness sector, which had been the focus of the three banks.

As of May, Rabobank channeled loans worth Rp 3.5 trillion, Hagabank Rp 3.53 trillion and Hagakita Rp 1.17 trillion.

Rabobank International Indonesia gained full control of Hagabank and Hagakita in 2006, through acquisitions.

Due to Bank Indonesia's single presence policy, in which no parties are allowed to own a controlling stake in more than one bank by 2010, Rabobank International decided to merge the banks.

As the country's economy is now developing more strongly than prior to the 1997 Asian financial crisis, a growing number of foreign financial groups have expanded their reach into Indonesia, either by setting up affiliates or by acquiring local entities.

In response to speculation in the stock market that Rabobank is eyeing mid-size Bank Bukopin for a further acquisition, Costa merely said that he could not comment on this.

However, Costa said the bank would always be on the lookout for such opportunities.

He believed that if an acquisition was planned, any decision would be made through Rabobank headquarters in Amsterdam.

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