Reuters
Jakarta
Standard Chartered has no intention to sell its 45% stake in Indonesia’s Bank Permata Tbk, the British lender’s Southeast Asia head said yesterday.
Standard Chartered’s abrupt move to shut its global equities business in January could be a prelude to the lender selling off stakes in a number of Asian banks as it looked to boost capital, people familiar with the lender’s thinking had previously said.
“We do not have the intention of disposal (of the stake) at this stage,” Lim Cheng Teck, CEO for Asean at Standard Chartered, told Reuters on the sidelines of the World Economic Forum in Jakarta.
Standard Chartered and Indonesian conglomerate PT Astra International Tbk owned 45% each in Bank Permata as of December 2014, according to Thomson Reuters data.
The two bought the stakes together in 2004 and 2006, paying a total of $548mn. At current market prices, a 45% stake in Bank Permata would be valued at around $660mn.
Bank Permata is expected to post an overall loan growth of 10% this year, slightly lower than 11-12% in 2014 due to the slowing economy, the Indonesian lender’s president director, Roy Arfandy, said in an interview.
Indonesian President Joko Widodo has identified infrastructure development as a priority for his administration, but rather than taking on the big state-owned banks for the projects, Permata would rather “support the supporting industries”, Arfandy said.
“We can provide working capital for the contractors,” Arfandy said. “Our risk appetite is five-seven years, definitely we cannot go for the 10-year projects.”
Permata will also focus on lending to small and medium businesses, as well as developing its Islamic banking segment such as by attracting the funds of Muslims who make their religious pilgrimage, Arfandy said.
Meanwhile, Standard Chartered said yesterday that it has a strong business case to move its headquarters from London to Singapore and save millions in taxes as, unlike HSBC, it doesn’t have a banking network in the UK, Aberdeen Asset Management said.
“It’s a far clearer business decision for Standard Chartered as really a far purer emerging market bank with no banking network in the UK, no banking network in Europe,” Hugh Young, managing director of Aberdeen Asia Management Asia, told Reuters in an interview yesterday.
A move to Singapore is logical for StanChart as its main franchise is in the city-state, besides Hong Kong and Africa, he said.
Aberdeen is the second biggest shareholder in Standard Chartered, with an aggregate 9.4% stake. Singapore state investor Temasek Holdings is the biggest shareholder in the British bank with a 17.7% stake.
HSBC and StanChart, who make most of their profits in Asia, face a combined $2bn bill this year under the annual UK bank tax, up from $1.5bn last year and almost double what they paid in 2013.
Several investors have said they want the two banks to do a thorough analysis on whether it makes sense to move after Britain raised the bank tax by a third last month. A big jump in the tax on UK banks has made staying in Britain increasingly painful for both HSBC and StanChart.
