PT Bank Mandiri (BMRI), the country’s largest bank by assets, is ready to expand to China next year following the issuance of a permit from the China Banking Regulatory Commission (CBRC).
Thomas Arifin, Mandiri’s director of treasury, financial institution and special assets management, said Thursday that with the issuance of the permit, Mandiri would be able to open a full-fledged branch in Shanghai, which was chosen because it was a strategic city for Indonesian customers entering the Chinese market.
He said the bank applied for the license in 2007 but faced various obstacles in obtaining it due to China’s tight regulation on foreign banks.
“We expect that our future branch in Shanghai could start operation in the first half of 2011 by providing various banking services, such as collecting corporate funds, channeling corporate credit, handling export and import transactions as well as remittance delivery,” he said.
Mandiri also has plans to next year open a new branch in another Asian country, Thomas added.
Currently, Mandiri, which has total assets of Rp 402.1 trillion (US$44.9 billion), runs six overseas branches in Timor Leste, Malaysia, Singapore, Hong Kong, the Cayman Islands and London.
Thomas said the establishment of the Shanghai branch was expected to increase the volume of bilateral trade between Indonesia and China to $50 billion in trade in 2011 from about $30 billion this year.
He added that Mandiri recently joined the China-ASEAN Interbank Association, which groups the China Development Bank (CBD) and major banks in ASEAN.
So far, the CBD has already distributed funds for several infrastructure projects in Indonesia, including the development of several power plants in South Sumatra, West Sumatra and Central Java.
The association aims at developing economic cooperation between the two blocs, financing infrastructure development projects in the region, facilitate the expansion of high-tech industries, international trade and business information sharing between the countries.
As of September this year, the bank recorded 1,234 transactions worth $403 million in trade activity between Indonesia and China mostly in the form of letters of credit.
In the same period, Mandiri also booked 12,554 transactions worth $2.7 billion in trade activity between Indonesia and other ASEAN countries. (lnd)
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