RHB Capital expects to begin Indonesia banking this year

A Malaysian financial group remains undeterred by Indonesian moves to cap foreign ownership in its banks.

Malaysian financial conglomerate RHB Capital Berhad expects to complete its acquisition of Indonesia’s PT Bank Mestika Dharma this third quarter and begin operations by year-end.

The US$358 million deal made in 2009 has been repeatedly delayed by uncertainties surrounding investment policies in Indonesia's banking sector. To those uncertainties have been added nationalist moves to cap foreign ownership in Indonesian banks triggered by last week’s takeover bid of Bank Danamon, Indonesia’s fifth largest bank, by Singapore’s DBS Group.

RHB group managing director Kellee Kam said the bank hopes to obtain the approval of Bank Indonesia, the central bank, for the proposed acquisition in June and complete the acquisition by the third quarter.

Several further prospective bank takeovers in Indonesia were put on hold last year after the central bank considered a rule imposing limits on foreign ownership.