SBI buys Indonesian bank for $6 mn

Acquires 76% stake in PT Bank IndoMonex.

State Bank of India (SBI) has acquired a small Indonesian bank "� PT Bank IndoMonex "� for about $6 million, to foray into Indonesia and expand presence in the Asean region.

The largest domestic commercial bank has executed documents for acquiring 76 per cent of the paid-up capital along with the management control of PT Bank IndoMonex, having its registered office in Jakarta. The acquisition of the Indonesian bank is subject to regulatory approvals and processes.

PT Bank IndoMonex is a closely held entity with seven offices located in Jakarta, Bandung and Surabaya. This is SBI's third overseas acquisition this year after Mauritius-based Indian Ocean International Bank and Kenyan Giro Commercial Bank.

Commenting on the acquisition, SBI chairman A K Purwar said the acquisition was made to gain an entry into Indonesia. "This step would not only help the resident Indian community, but also facilitate trade and investment, and provide us with a platform to participate in the growth and prosperity of a friendly country," he said.

"East Asia has had historical links with India and has been viewed with interest by SBI. With the proposed acquisition, the bank would increase its footprint in the Asean region where we are already present in Singapore. SBI has developed strong skills in various aspects of banking which would be of relevance to the Indonesian market," he said.

Earlier this year, SBI had bought a 51 per cent stake in Mauritius-based Indian Ocean International Bank, having a network of 10 branches and 10 ATMs.

It had acquired 76 per cent stake in closely held Giro Commercial Bank of Kenya for about $7 million. The bank founded by people of Indian origin has six branches in Nairobi and one each at Mombassa and Kisumu. Giro Bank has an asset base of $60 million, as on August 30, 2005, and is ranked 23rd among Kenyan banks in terms of assets size.

Assets of the SBI's foreign branches increased from $6,276.20 million as on March 31, 2004 to $9,114.03 million as on March 31, 2005. The customer credit rose to $5,536.85 million at the end of March 2005 from $3,657.85 million during the previous year. Similarly, customer deposits increased to $3,257.24 million from $2,017.60 million from March 31, 2004.