DBS Will Decide The Merger or Create A Holding

The President Director of Danamon Bank Ltd, Henry Ho, do not yet know whether DBS Singapore will decide to Bank merged with DBS Bank Danamon Indonesia or create a local holding company for the two banks.

“Yes there is now an alternative to create holding company. We must wait for the whole acquisition process first. DBS will be decided. I can’t speak on behalf of DBS,” said Henry Ho after attending the annual meeting of the principals of banking with Bank Indonesia (Bankers Dinner), on Friday, November 23, 2012 as reported by Antara.

Henry also do not yet know which option is most advantageous for Danamon. “We need to see. We have yet to consider it. Don’t know yet.” He explained, it should be read in detail the policy.

Overnight, Bank Indonesia announced newest eight work rules. One of them is about easing the rules a single possession of the bank or the single presence policy. BI will no longer require that the controlling shareholder in more than one bank to banks merged. BI had no other alternative. Controlling shareholder could form a holding company.

“With this option, then the strategic investors who have become the controlling shareholder in a bank can become a controlling shareholder in the bank, in the absence of an obligation to do a merger or consolidation,” said Darmin.

Even so, Darmin added, BI provides incentives for banks that will do a merger or consolidation. “It is possible the incentives which have been in effect since a few years ago,” Darmin said.

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BI provides specificity for the controlling shareholder in the form of bank Indonesia law body. The Bank is only required to form the holding function. The holding is formed as a function of one organ in the Organization of the bank became the controlling shareholder and is led by one of the members of the Board of Directors of the bank.

Director of research and Banking Arrangements Directorate BI, Irwan Lubis, explained, in the case of DBS-Danamon, if foreign investors hold a controlling stake in the two banks, investors must make a local bank holding company includes the DBS-Danamon. “If the foreign drivers in the two businesses, which is the same case with Maybank, CIMB-(if not a merger) to form Limited that serves as a holding company,” he said.

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