Mumbai, Nov. 7: State Bank of India has struck its third overseas deal by acquiring a 76 per cent stake in PT Bank IndoMonex, Indonesia, for an undisclosed sum.
PT Bank IndoMonex is a closely-held entity and has seven offices in Jakarta, Bandung and Surabaya. The acquisition has been done to gain an entry into Indonesia, SBI chairman A.K. Purwar said. It would also help the bank make its presence felt in the Asean region, he added.
“East Asia has had historical links with India and is viewed with interest by SBI. With the proposed acquisition, the State Bank would increase its operations in the Asean region where it is now present in Singapore. SBI has developed strong skills in various aspects of banking which would be of relevance to the Indonesian market. I expect this step would benefit not only the resident Indian community, but also facilitate trade and investment,” Purwar said today.
The acquisition is part of SBI’s gameplan to see an enhanced contribution from its international business. This is expected to come from both organic and inorganic growth. Over the next couple of years, SBI’s overseas operations is expected to contribute 20 per cent of its bottomline from a single-digit figure at present.
Purwar, who has masterminded the bank's overseas acquisitions so far, had in the past indicated that the bank's focus areas will be on Asia and Africa. The bank plans to not only look at the needs of the Indian diaspora or trade overseas, but also serve the populace there by having a larger physical presence.
It was only last month that the country's largest commercial bank announced plans to acquire a majority stake in Kenyan Giro Commercial Bank. The deal, priced at around $8 million, involved buying out the principal shareholders who were of Indian origin.
SBI acquired close to 76 per cent of the bank which had an asset base of $60 million as on August 30. The acquisition enabled SBI in increasing its presence in Africa where it is present in four other countries.
It was in February this year that SBI acquired a 51 per cent stake in Mauritius-based Indian Ocean International Bank (IOIB). Here too, the bank paid close to $8 million for the acquisition.
Meanwhile, SBI has raised $30 million by selling five-year bonds at a floating rate of 60 basis points (0.6 per cent) over Libor.
