HSBC acquires 88.89% of Bank Ekonomi

HSBC Limited has completed its acquisition of 88.89 percent of Bank Ekonomi for US$607.5 million. The deal was coursed through its wholly-owned subsidiary of HSBC Asia Pacific Holdings (UK) Limited.

Bank Ekonomi or PT Bank Ekonomi Raharja Tbk is one of the largest providers of SME banking services to the fourth most populous nation globally. The acquisition will almost double HSBC’s presence in the country to 207 outlets in 26 cities. This will enable HSBC to deliver its full local, regional and international capabilities to an expanded Indonesian customer base.

Under the terms of the agreements, which were originally announced in October 2008, and according to Indonesian law, HSBC will be required to make a Mandatory Tender Offer (MTO) for a further 10.11 percent of Bank Ekonomi.

Rakesh Bhatia, Chief Executive Officer of HSBC in Indonesia, said: "The HSBC Group has long viewed Indonesia as a market with substantial opportunities for growth. This acquisition allows us to increase our footprint in the country where, following this acquisition, we are now one of the top three foreign banks by assets."

"Together with recent investments in Vietnam, Taiwan and India, Bank Ekonomi will increase our presence in the world’s fastest growing markets," said Sandy Flockhart, Chief Executive Officer of HSBC Asia Pacific. "Indonesia’s GDP is forecast to grow by 2.5 percent this year and by 4.5 percent in 2010 – bucking the global downturn and demonstrating the country’s emerging strength," she added.

Bank Ekonomi will operate as a separate entity to HSBC’s existing Indonesian business and remain listed on the Indonesian stock exchange. HSBC’s existing customers will continue to be served by HSBC through its existing network.