RHB Cap delays application to buy Bank Mestika

PETALING JAYA: RHB Capital Bhd (RHB Cap) has put on hold its application to acquire Indonesia's PT Bank Mestika Dharma pending a review by Indonesia's central bank to impose a limit on single-party ownership in commercial banks there.

“It is too early for us to comment further at this stage as there is no clarity on the outcome of the new ruling.

“We continue to closely monitor the developments,” RHB Cap told StarBiz via e-mail yesterday.

RHB Cap's decision to put on hold its proposed buy of Bank Mestika comes amid Bank Indonesia's plans to limit single-party ownership in commercial banks to not more than 50%.

However, this is still at the assessment stage.

RHB Cap had earlier stated its intention to buy 80% in Bank Mestika for RM1.16bil.

If RHB Cap aborts its plan to buy Bank Mestika, it will be the second local bank to do so after Affin Holdings Bhd said last month that it had cancelled its plan to acquire Indonesia's PT Bank Ina Perdana following reports that the country was planning to impose the limit on single-party ownership.

Indonesia has become an attractive target for Malaysian banking groups in recent years in line with that country's rapid growth in population, economic rate and disposable income.

Since reports of a possible cap on single-party ownership in Indonesian banks started to gain momentum in the past two months, analysts have said that the ruling, if implemented, would likely force Malaysian banks to look elsewhere for growth.

Local banking groups with sizeable stakes in Indonesian units include Malayan Banking Bhd with a 95% shareholding in PT Bank Internasional Indonesia and CIMB Group Holdings Bhd with a 96% stake in PT Bank CIMB Niaga Tbk.

For the half year ended June 30, CIMB Niaga was the largest contributor to CIMB group's pre-tax profit at 29% compared with 36% in the first half of 2010.