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BNI signs deal to attract more Japanese clients

State-owned Bank Negara Indonesia (BNI) has secured a partnership agreement with Japanese bank Iyo Bank, the largest regional bank in Shikoku prefecture, to further strengthen the company’s foothold in the Japanese banking market

The Jakarta Post
Jakarta
Sat, November 17, 2012

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BNI signs deal to attract more Japanese clients

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tate-owned Bank Negara Indonesia (BNI) has secured a partnership agreement with Japanese bank Iyo Bank, the largest regional bank in Shikoku prefecture, to further strengthen the company’s foothold in the Japanese banking market.

Iyo Bank became the 42nd Japanese regional bank to have signed a partnership agreement with BNI.

Abdullah Firman Wibowo, BNI’s international division head, said the cooperation agreement with Iyo Bank would enable BNI to provide more financial services to Japanese clients, especially those who had businesses in Indonesia.

Firman said that at least 63 of Iyo Bank’s corporate clients had business units in Indonesia, but none of them had used BNI’s banking services. He hoped that with the partnership, BNI would be able to attract more Japanese clients.

“Japanese firms always conduct their banking services based on references by local banks. They will never bank with an Indonesian bank if there is no reference from a local bank in Japan,” Firman told The Jakarta Post in an interview on Friday.

“With the signing of the agreement, we hope to attract at least 30 Iyo Bank depositors,” he said,

Besides the expected increase of deposit funds, Firman said he hoped the deal would boost BNI’s profits from fee-based banking services regularly carried out by Japanese firms in Indonesia, such as consumer banking and foreign exchange transactions.

Iyo Bank, which has 150 branches in 13 prefectures in Japan, manages around Rp 550 trillion (US$57.14 billion) in assets, almost twice the total assets overseen by BNI, Indonesia’s fourth-largest bank by assets.

The agreement between BNI and Iyo Bank was signed on Thursday by Iyo Bank’s international division general manager, Kazutomi Hirai, and BNI’s Japan branch head, Gatoet Gembiro Noegroho.

“This [the agreement] is in line with the commitment of BNI, Indonesia’s national bank with the most extensive international network, to bridge the world and Indonesia,” Gatoet said in a statement.

Following the deal with Iyo Bank, BNI signed agreements with 42 Japanese regional banks, slightly lower than its 2012 target of 46. Currently, BNI manages approximately Rp 1.5 trillion in deposits owned by Japanese companies operating in Indonesia. The bank expects to increase the figure to Rp 2 trillion by the end of this year.

BNI, the only Indonesian bank with a branch in Japan, established a Japan Desk earlier this year to focus on attracting more funds from Japanese investors doing business in Indonesia.

The establishment of the service is a proven financial boon for BNI. Firman estimated that annual revenues following the establishment of the Japan Desk would top Rp 200 billion this year from various transactional services, such as payroll services, cash management, trustee, and trade finance.

Japanese investment reached $1.8 billion in the January-September period, data from the Investment Coordinating Board (BKPM) shows. The figure made Japan Indonesia’s second-largest foreign direct investment (FDI) source after Singapore, which invested $3.5 billion during the same period.

With its extensive network in Japan, BNI planned in the future to collaborate with the BKPM to attract more Japanese companies to Indonesia, with the lender acting as a source of financing for those firms, Firman added.

In October, BNI invited representatives from Japan’s medium-sized firms, mostly customers of its Japanese partners, to visit the Karawang industrial zone in West Java and explore investment opportunities in the area. (sat)

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