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Union Bank in talks to buy Indonesian banks

Press Trust Of India  |  Mumbai 

Government-owned Union Bank of India has initiated preliminary discussions with three-four small-sized Indonesian banks for a possible acquisition, a top bank official said.

“We are talking to three-four small banks in Indonesia for potential acquisitions. Talks are at very preliminary level and nothing has been finalised so far,” the official said.

Union Bank’s board has already approved a strategy for its overseas expansion, which includes acquisitions in geographies like Indonesia, Africa, Europe and UK, the official said. Once the bank identified a target, the lender would seek regulatory approvals from RBI and the Indonesian banking regulator to go ahead with the proposal, the official added.

“Through the acquisition of a local bank, we aim to assist Indian entities operating in that region, facilitate trade financing and offer retail banking services to local clients,” the official said.

At present, Union Bank’s overseas presence is limited in Hong Kong, where it has a full-fledged branch. Besides, it has four representative offices abroad. The repo offices are Shanghai, Beijing, Abu Dhabi and Sydney.

Another state-run lender IDBI Bank had yesterday said that it was talking to a private sector bank for possible acquisition and has completed the due diligence. “It is a private sector bank. Talks are on. Due diligence has been done. I cannot commit on the time frame,” Agarwal said.

Major Indian banks having presence in foreign countries include State Bank of India, Bank of Baroda and ICICI Bank.

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First Published: Thu, January 14 2010. 00:51 IST