Indonesia allows DBS to buy 40% stake in Bank Danamon

22 May 2013

Singapore's DBS Group, south east Asia's biggest bank, has been given approval to purchase a 40 per cent stake in Indonesia's Bank Danamon.

The group launched a $6.8 billion takeover bid for full control of Danamon more than a year ago, although the deal was delayed after Indonesian regulators moved to limit foreign ownership in local lenders.

Indonesia has now said a full takeover is possible, but on the condition Singapore opens up its banking sector in return.

Indonesia's new bank rules also mean DBS will have to pass three financial tests over 18 months.

The outgoing Indonesian central bank governor Darmin Nasution told the BBC: "We can approve the 40 per cent ownership of Danamon by DBS and will not give them more unless there is some reciprocity."

DBS Group has been looking to expand its lending operations in Indonesia as the country's economy forecast is set to grow by more than six per cent this year as a result of an increase in domestic demand.

By Tony Aynsley

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