OJK: Bank Ekonomi to Relist Following HSBC Integration


MARCH 11, 2015

Jakarta. Indonesia's Financial Services Authority will seek the relisting of Bank Ekonomi Raharja on the nation's bourse after the lender's assets are combined with the local unit of its majority shareholder HSBC.

HSBC has submitted a proposal that assets of the two Indonesian banks will be combined under Bank Ekonomi, Muliaman Hadad, chairman of the regulator known as the OJK, told reporters last Friday. That would leave HSBC's Indonesian unit as a streamlined entity focused on investment banking, he said.

Bank Ekonomi had sought to delist its shares, according to a Feb. 16 exchange filing by HSBC, which said it was planning to integrate its local unit's operations with the Indonesian lender. Shares in Bank Ekonomi, 99 percent owned by HSBC, have been suspended from trading since then.

"We will ask them later to refloat again in the proposal, that's a promise," Hadad said. "There will be time given, until all of this process is concluded. In several years, not this year."

A public offering would sell at least 20 percent of the combined entity under Bank Ekonomi's name, Hadad said. An HSBC spokesman declined to comment.

HSBC said in June 2013 that it was reviewing its stake in Bank Ekonomi, without giving any reason for doing so. The London-based lender bought 88.9 percent of the Indonesian company for $607.5 million in 2008, a move that almost doubled its branch network in the country.

HSBC's current share is worth Rp 5.55 trillion ($420 million), based on Bank Ekonomi's last stock price of Rp 2,100.

The Indonesian lender had total assets of Rp 29.7 trillion at the end of December, 3 percent higher than 2013, according to its 2014 financial statement. HSBC's local unit has 47 branches with more than 3,000 employees.