JAKARTA (TheInsiderStories) - Publicly listed firm, PT Bank Permata Tbk (IDX:BNLI) officially became a commercial bank business activity IV (Book IV) after receiving a confirmation from the regulator on Jan. 20. With a core capital more than Rp30 trillion (US$2.14 billion), the unit of the Bangkok Bank Public Co. Ltd., has met the minimum core capital requirement.
Ridha Wirakusumah, president director of the issuer said, “We are committed to strengthening PermataBank’ role as an agent of development supported by strong capital, prudential banking in accordance with good corporate governance and the sustainable development of our comprehensive digital banking platform and services.”
Last year, Bangkok Bank has get an approval ot integrated PermataBank its Indonesia’ branch office. With this integration the lender met the requirement to become a BOOK IV bank with a capital ratio more than 30 percent. The business license of the Bangkok Bank’ branch office shall be revoked within two years time after the effective date of the integration.
Chartsiri Sophonpanich, president of Bangkok Bank and chairman of PermataBank, said, “This strategic partnership will be good not only for Bangkok Bank and PermataBank, but also help the ASEAN financial integration.”
On May 20, 2020, Bangkok Bank, PT Astra International Tbk (IDX: ASII), and Standard Chartered Plc, signed a sale and purchase agreement for the company shares, with a valuation of 1.63 times the book value of PermataBank or around Rp33.66 trillion ($2.40 billion).
Recently, Moody’s Investors Service has upgraded the long-term local and foreign currency deposit ratings of the unit of Bangkok Bank from Baa3 to Baa2. The agency has also upgraded the lender’ Adjusted Baseline Credit Assessment to baa2 from ba1. The outlook has been changed to stable from ratings under review.
The upgrade of PermataBank‘ long-term deposit ratings after Bangkok Bank (Baa1 stable, baa1) completed its acquisition of a 89.12 percent stake of the bank on May 20. The lender is Bangkok Bank’ most significant overseas investment to date and will account for around 10 percent of the latter’ total loans.
More importantly, the company will represent a critical part of the new parent’ long-term strategy to diversify outside of Thailand and capture business opportunities in the growing intra-Southeast Asia trade space.
At the same time, Moody’s has downgraded the level of support that the local bank will receive from the government of Indonesia (Baa2 stable) to moderate from high, taking into consideration PermataBank‘ modest deposit market share, as well as its assessment that the authorities will be less forthcoming in providing support in times of need because they will expect Bangkok Bank to do so.
The rapid and widening spread of the COVID-19, deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The banking industry in Indonesia has been one of the sectors affected by the shock, given the widespread decline in business revenues that has hurt borrowers’ debt-servicing ability.
US$1: Rp14,000
Written by Editorial Staff, Email: theinsiderstories@gmail.com
