Jakarta. Bangkok Bank, Southeast Asia's sixth-largest lender by assets, saw ample opportunities to bridge more Thailand businesses to invest in Indonesia and bring the two economies closer following a landmark deal that saw the lender acquire Bank Permata, one of Indonesia's largest lenders last year.
“Bangkok Bank is pleased to help bring investment into Indonesia as well as help Indonesian companies seeking gold opportunities across Asean and beyond," Chartsiri Sophonpanich, president of Bangkok Bank and president commissioner of Bank Permata said, during a media visit to Berita Satu Media Holdings on Thursday.
"With the synergy between Bangkok Bank and PermataBank and our international network, we will work together to create opportunities for our clients to do more in Indonesia,” Sophonpanich said, referring to the local lender by its trade name.
He said Indonesia’s agriculture and automotive industries as areas that have captured the interests of Thai clients. The opportunities also lie in long-term infrastructure, as Indonesia is abundant in natural resources, Sophonpanich said.
Last month, Thai Oil, the country's largest refinery, inked a deal to invest Rp 25 trillion ($1.7 billion) in Chandra Asri Petrochemical, a local petrochemical company, highlighting the massive potential for Thailand's investments in Indonesian companies.
In Indonesia, foreign direct investment (FDI) is steadily climbing, bucking the global downtrend following the Covid-19 pandemic. The total FDI investments reached $8.0 billion in the second quarter this year, up by 17 percent from $6.8 billion last year, data from the Investment Coordinating Board (BKPM) showed.
In the first semester of 2021, Thailand has thus far invested $319 million, compared to the $49 million invested in Indonesia in the first half of 2020, BKPM data showed. The investment board does not include finance, banking, and the oil and gas sectors in its FDI statistics.
Bangkok Bank acquired Bank Permata, Indonesia’s 12th largest bank by assets, last year in a $2.3-billion deal that increased Bangkok Bank’s international portfolio to about 25 percent of its total portfolio, from just 18 percent previously.
The acquisition and subsequent merger with Bangkok Bank's three branches in Indonesia have also allowed Bank Permata to become a BUKU-4 bank, with more than Rp 30 trillion in core capital.
"As a BUKU-4 bank, PermataBank can offer a wide range of services to more Indonesian customers. Bangkok Bank’s Indonesian customers can also gain access to a wide range of enhanced banking services that we could previously offer through our foreign bank branches," Sophonpanich said.
So far, it has proved beneficial for Bank Permata's performance, as the lender managed to reap a net income of Rp 639 billion in the first half of 2021, a 75 percent increase compared to the same period last year.
Sophonpanich said that the integration of banking and service industries would only be increasing in the years to come, especially considering the global Covid-19 pandemic.
Similar to how the SARS virus in 2003 led to an increase in e-commerce and online systems in China, Sophonpanich believes a change in banking and financial systems will also occur throughout Asean due to the pandemic.
Most notably, this change would come in the form of mass digitalization. In the future, the company plans to focus on digitalization and its youth groups. This includes digital transactions beyond banking and digital innovation that are seamless and understand their client’s lifestyle.
Sophonpanich is confident that business post-pandemic will blossom. “Covid-19 is changing the behavior of our industry. We will definitely see more integration, cooperation, and collaboration amongst different entities together in the future,” he said.
Kobsak Pootrakool, the executive vice president of Bangkok Bank, agrees with this sentiment and added the possibility of more unity within the Asean banking industries as a whole, “Covid-19 will pass, and the Asean region will strive back very strongly. As time passes, one Asean will be possible, and all the services will follow too,” Pootrakool said.