T

he move by South Korean lender Shinhan Bank into the Indonesian banking market is well under way following its acquisition of two small-sized lenders.

Seoul-based Shinhan has reportedly completed the acquisition of a 75 percent shareholding in Centratama Nasional Bank, according to various reports.

The acquisition of Centratama, which is based in Surabaya, East Java, comes two months after Shinhan was granted approval by the Financial Services Authority (OJK) in April to take over a 40 percent stake in Bank Metro Express. The acquisition of Metro Express '€” a Bandung-based bank '€” was valued at Rp 700 billion (US$52.51 million).

No detailed information was immediately available regarding the acquisition of Centratama and The Jakarta Post was not able to contact Shinhan for comment.

However, the Post'€™s sources '€” who wished to remain anonymous because of the sensitivity of the issue '€” confirmed the reports. Under existing regulations, a foreign investor can only acquire a maximum 40 percent stake in a local bank.

However, the OJK has made it clear that it is ready to grant majority ownership '€” more than 40 percent '€” to foreign investors willing to take over domestic banks, so long as they are committed to purchasing two banks at once and then merging them into one.

OJK deputy commissioner for banking supervision Irwan Lubis said that he had heard reports of the Centratama acquisition, but the regulator had not obtained official documents on the takeover.

'€œBut the latest progress would be in line with what Shinhan has stated to us about its willingness to help realize banking consolidation in Indonesia,'€ he said. When that happens, we will allow it majority control,'€ Irwan said, adding that Shinhan would focus on providing export financing with the new entity.

Similar to Shinhan, China Construction Bank (CCB) is also looking to consolidate two local lenders as part of its efforts to venture into the domestic banking system.

OJK deputy commissioner for banking supervision Mulya Siregar previously said that CCB had begun the acquisition process of Bank Windu Kentjana International, a small bank based in Jakarta.

However, the Post'€™s sources stated that CCB had set its sight on Bank Antardaerah '€” popularly known as Bank Anda '€” as well.

Bank Anda currently runs its operations in several areas, including Jakarta, Surabaya and Bandung. Its main office is located in Surabaya.

When contacted, Bank Anda president director Bujung Rudijanto Hanani said that its management had not been informed of the acquisition plan.

'€œWe have not received any statement [from CCB] or begun any correspondence about it,'€ he said in a text message.

Meanwhile, Irwan said that it was possible for CCB to first take over Windu and then let the latter acquire its own subsidiary.

'€œThe subsidiary can then be merged with Windu as the parent company. That is also a consolidation scheme that CCB can choose. This is just a technical matter and it can work it out by itself,'€ he said.