Handelsbanken is yet to commit to opening branches in the archipelago. The lender wants to help Indonesian companies gain access to markets to promote trade between Indonesia and Europe. (Antara Photo/Andika Wahyu)

Sweden's Handelsbanken Is Eying Indonesia


MARCH 13, 2015

Jakarta. Sweden’s Handelsbanken plans to service Indonesian customers and work alongside local banks to assist businesses in the archipelago to access European markets.

Handelsbanken opened a representative office in Jakarta on Thursday in a move to both promote Indonesia to the customers in its home markets and into tap Indonesia’s upbeat economic growth.

“One of the tasks of the rep office here is, of course, to help with various issues that these clients can come across in this country,” Jan B. Djerf, Handelsbanken’s head of South Asia Pacific, said on Thursday.

“On the other hand, it’s also to help Indonesian companies gain access to Handelsbanken’s home markets to promote trade between Indonesia and Sweden and Finland, UK and the Netherlands. It goes in both directions,” Djerf said.

Handelsbanken’s move follows several Swedish companies that have recently launched in Indonesia, most notably Saab, an aerospace and defense company.

Still, the lender’s timing could be better. The Financial Services Authority (OJK) has banned foreign lenders from opening  branch offices in Indonesia, in a move to push these banks to instead acquire or merge with local banks.

“There will be no any new foreign bank branches, but foreign lenders may still open representative offices,” said Nelson Tampubolon, the executive director for banking supervision at the OJK, as quoted by Kontan on Thursday.

A representative office is not allowed to take deposits or lend money, limiting its access to potential new customers in Indonesia. According to Djerf, the office will not conduct any actual business dealings and will act more on “liaison kind of activities.”

The branches will be supported by the representative office in Singapore. “We are also having close operations with a number of Indonesian banks, primarily in Jakarta ... [The cooperation] could be trade finance, could be bilateral issues between Handelsbank and [local] banks, can be guaranteed business,” he said.

Although the lender finds Indonesia an interesting country in terms of potential customers and economy growth through its own market survey, Handelsbanken does not have any plans to add a subsidiary bank or a branch network in the short term.

“We don’t have any such plans at this time. In one way, you could say the rep office is a continuation of this market survey. So it’s not like we’re open the rep office year one and that automatically means we have branch year four, no,” Djerf said.

Handelsbanken has had a representative office in Taipei since 1991 but the lender has not launched any branches in Taiwan. On the other hand, Handelsbanken has had a representative office in Beijing since 1992, and the lender has since launched branches in Shanghai. The Jakarta office is one of the bank’s 25 global offices.

The lender holds 2.82 trillion Swedish krone ($328 billion) in assets with business focused mainly in Sweden, Denmark, Finland, Norway, Britain and the Netherlands.

The Swedish ambassador to Indonesia, Johanna Brismar Skoog, showed her appreciation and optimism toward the lender in the ceremony, saying, “It also one of the most solid and profitable banks in the world and it enjoys an outstanding reputation.”

There are currently 10 other foreign banks operating branch offices in Indonesia, including Bank of America, The Royal Bank of Scotland, Bangkok Bank, Citibank, HSBC, Bank of China, Deutche Bank, JP. Morgan Chase Bank, The Bank of Tokyo-Mitsubishi UFJ, and Standard Chartered Bank.

These banks lent a combined Rp 2,959 trillion ($224 billion) to companies, individuals, and other banks in Indonesia during 2014.