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hrough subsidiary PT Mandiri Sekuritas, Indonesia’s largest lender, Bank Mandiri, plans to expand its brokerage business in Singapore to tap growing foreign investor interest in Indonesian equity assets.

Bank Mandiri finance director Pahala N. Mansury said in Jakarta on Monday that the bank would allocate about US$4 million to expand Mandiri Sekuritas, which was already operating in Singapore under a limited license.

To expand, Mandiri Sekuritas has been negotiating with Singapore’s banking regulator, the Monetary Authority of Singapore, to upgrade its business license so it could sell Indonesian stocks and corporate bonds directly to investors in Singapore.

Under its current license, Mandiri Sekuritas can only offer Indonesian stocks and bonds through local sales agents.

“The new license will boost the growth of Mandiri Sekuritas and Mandiri Manajemen Investasi [MMI],” Pahala told reporters at a press briefing on Monday.

MMI, an asset management subsidiary of Mandiri Sekuritas, also has announced plans to open a local unit in Singapore.

“We’re actually a little late, as we had initially expected Mandiri Sekuritas and MMI to operate under their new licenses before October,” Pahala said.

“We hope that we will have obtained the licenses from the local regulator before the start of the new year.”

After finishing its expansion in Singapore, the Indonesian lending giant is setting eyes on Hong Kong as its next destination to grow its investment banking business, according to Pahala.

Mandiri has booked increasing contributions to consolidated earnings from six subsidiaries: Mandiri Sekuritas, Bank Syariah Mandiri, AXA-Mandiri Financial Services, Bank Sinar Harapan Bali, Mandiri Tunas Finance and Mandiri AXA General Insurance.

The subsidiaries comprised 13 percent of the lender’s consolidated earnings up from 5.6 percent in 2009.

However, Mandiri Sekuritas has not been among the profit makers for Mandiri this year after the subsidiary posted net losses of Rp 47.22 billion (US$4.97 million) in the first half, that Mandiri Sekuritas attributed to fierce competition between securities companies.

Despite the losses, Mandiri Sekuritas has been named as the underwriter for companies such as PT Kobexindo Tractors, PT Toga Bara Sejahtera and PT Bank Pembangunan Daerah Jawa Timur, as well as for 15 bond issuances.

Mandiri Sekuritas president director Harry Supoyo said in August that the firm also had 11 bond issuances and eight more initial public offerings (IPO) in the pipeline.

The total value of the IPOs and the bond issuances underwritten by Mandiri Sekuritas topped Rp 6.78 trillion in the first half of 2012, or about 11.7 percent of total debt and equity underwriting market.

Shares of Mandiri Sekuritas’ parent company, Bank Mandiri, listed in the Indonesian Stock Exchange (IDX) as BMRI, are currently among the most traded blue chip stocks on the local bourse.

BMRI shares closed at Rp 7,900 on Monday’s closing, unchanged from its opening price, but up 20 percent since it went public at Rp 6,602 per share on January 2. (sat)