Jakarta. Bangkok Bank is making its Indonesian presence felt by acquiring Bank Permata in the largest deal in its history, but its chief executive said on Thursday he looked beyond short-term returns with the expanded consumer base in the neighboring country.
Following the acquisition in 2020, Bangkok Bank integrated its three Indonesian branches into Permata Bank, making it the sixth largest Southeast Asian bank by assets.
For Permata Bank, it’s now listed among Indonesia’s top ten largest banks.
“Our investment in Permata was part of our regionalization strategy. Not only was it the largest acquisition in our history, it was also the largest ever intra-ASEAN bank acquisition,” Bangkok Bank President Chartsiri Sophonpanich said in a video conference with the Jakarta Globe.
Bangkok Bank was the first commercial bank in Southeast Asia to establish an overseas branch by opening an office in Hong Kong in 1954 to support customers looking for economic opportunities outside of Thailand.
It has since run a global network of more than 300 branches in 14 economies with more than 900 correspondent banks worldwide outside of Thailand.
Chartsiri said Bangkok Bank is committed to building long-term relationship with Indonesian customers by helping them explore opportunities in the region and beyond in a disruptive era due to the Covid-19 pandemic and digital transformation.
“This is what we call puan koo kit mit koo baan, which means ‘be a trusted partner and a reliable close friend’. This is especially true during a time of crisis, such as this,” he said.
“I often reflect on the advice my father gave me during the 1997 Asian financial crisis, that the world is small and that we need to help people in good times and in bad times.”
The philosophy has helped Bangkok Bank become a regional powerhouse and will remain true even in a more digitalized world and wider regional reach after the latest acquisition, he said.
“We do not simply lend money. We want to help customers solve problems, helping them identify their business opportunities in disruptive times and providing them with advices and other support they need to transition so they can thrive in the future,” the US-educated banker said.
“We look beyond short-term returns and focus on long-term sustainable results and building long-term relationship with customers.”
Bangkok Bank has been doing business in Indonesia since 1968 with an office branch in Jakarta. It took 44 years before the second branch was established in the East Java capital of Surabaya, followed a year later by the third in Medan, capital of North Sumatra.
By owning Permata, its Indonesian operations suddenly expanded to more than 300 branches in over 60 cities.
Permata Bank was acquired partly because of “its strong digital capabilities” in Indonesia, one of the region’s most vibrant technology and fintech startup ecosystems, Chartsiri said, adding that
Covid-19 has accelerated digital transformation at every level of society.
The acquisition allows Bangkok Bank to offer its Indonesian customers enhanced banking services previously available at its foreign bank branches and help Permata’s customers identify and assess regional growth and investment opportunities using its regional strengths and expertise.
“This way enables us to assist more regional and international customers in doing business in Indonesia and increase investment in the country, which will support its economy, its people, and businesses,” he said.
Chartsiri said he believes that regional economic bloc ASEAN will play an increasingly significant role in this “Asian century”.
“ASEAN is the world’s fifth largest market with some 650 million people. Once we get through the pandemic, the region will remain one of the most attractive destinations in the world for investment, trade and manufacturing,” he said.
Acquiring Permata increases Bangkok Bank’s presence in Indonesia, the largest economy in the region.
“Indonesia has a key part to play in this Asian century. It is one of the fastest growing markets in the world. It has strong fundamentals and the bright future ahead of it,” he said.
“Bangkok Bank and Permata Bank have strong synergies and we can offer more together.”