According to two people who know the situation, companies seeking to purchase Indonesia’s PT Bank Commonwealth include Malaysian bank CIMB (CIMB.KL) and Japanese financing business J Trust (8508.T). The acquisition may value the lender at $400–$500 million.
The largest lender in Australia, Commonwealth Bank of Australia (CBA) (CBA.AX), owns 99% of Bank Commonwealth, specializing in corporate banking services for small and medium-sized businesses and retail financing. Morgan Stanley, the sale’s financial advisor, has pushed bidders to submit legally binding bids by early November, according to sources who requested anonymity.
According to the sources, J Trust and CIMB, the second-largest bank in Malaysia, have indicated interest and are considering making binding offers. In Indonesia, both businesses have banking branches. Morgan Stanley, J. Trust, CBA, and CIMB declined to comment.
Bank Commonwealth did not answer a request for comment from Reuters. The institution’s total assets last year were 18.39 trillion rupiah ($1.1 billion), according to its annual report. The firm also offers wealth management services.
It experienced a loss of almost 350.77 billion rupiah in 2022—more than twice as much as it did the year before—the report stated, blaming difficulties brought on by the COVID-19 epidemic. It was founded as a CBA partnership with Bank International Indonesia in 1997. In 2002, CBA acquired a majority stake in the company and renamed it Bank Commonwealth.
The interest in Bank Commonwealth coincides with predictions that growth in Indonesia, the largest economy in Southeast Asia, will drop after hitting a three-quarter high in April-June.
According to LSEG statistics, M&A activity in Southeast Asia fell 34% to a seven-year low of $88.9 billion in the first nine months of this year, while the region’s banking sector saw a 66% decline to $9.8 billion. Most retail banks in Australia have stopped performing non-core business to concentrate on domestic services.
For around A$1.8 billion, CBA sold the Hangzhou municipal government’s holdings in 10% of China’s Bank of Hangzhou (600926. SS) last year.
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