HONG KONG, CHINA—The world’s second largest lender by market value, China Construction Bank (CCB), has made a formal bid for a controlling stake in the Bank Maspion Indonesia. China Construction Bank has only made a preliminary inquiry into the acquisition and has not decided yet if it is going to make a binding offer.
The CCB is likely waiting to see what new rules the Indonesian government will put into place after the country announced that it would be changing bank ownership laws, potentially making it difficult for the CCB to acquire an ownership stake in Bank Maspion Indonesia.
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Bank Indonesia, the country’s central bank, has said that it intends to limit a single investor’s maximum ownership stake of commercial banks in order to improve its ability to regulate the banking industry. This could seriously hamper China Construction Bank’s bid for control since Indonesian Governor Darmin Nasution made it clear that the limit will be below 50 percent.
This would seemingly deter foreign investment in Indonesia’s banks since most investors want to acquire as close to a majority share as possible when so much money is on the line. Yet Chinese companies seem to be undeterred after making $681 million worth of acquisitions in Indonesia in the last year.
Indonesia joins Malaysia and Singapore as countries in Southeast Asia that impose restrictions on ownership of commercial banks.