HSBC purchases 88.89% of PT Bank Ekonomi Raharja

The Hong Kong and Shanghai Banking Corporation (HSBC) Limited has announced the completion of acquiring 88.89 per cent of PT Bank Ekonomi Raharja Tbk (Bank Ekonomi) for US$607.5 million through its wholly-owned subsidiary of HSBC Asia Pacific Holdings (UK) Limited.. The purchasing decision was made following the advice of the Global Banking and Markets division of the HSBC Group.

Bank Ekonomi is one of the largest providers of SME banking services in Indonesia and is expected to almost double HSBC’s presence in the country to 207 outlets in 26 cities. Bank Ekonomi will function as a separate entity to HSBC’s Indonesian business and remain listed on the Indonesian stock exchange. It was also announced that HSBC’s existing customers will still be served by HSBC through its existing network.

However, HSBC is required to make a Mandatory Tender Offer (MTO) for a further 10.11 per cent of Bank Ekonomi, in accordance with the terms of the agreements, and Indonesian law. The results of the MTO will be published in the Indonesian press and distributed to Bank Ekonomi shareholders in accordance with local regulations after they are approved by the local regulators.

Currently HSBC offers Indonesians following services: personal financial services, corporate, commercial banking, institutional banking, treasury capital markets and Amanah Syariah services. The business had reported a profit before tax of US$121 million in 2008.