HSBC to buy Bank Ekonomi for $607.5 mn

LONDON: Global banking giant HSBC said here on Monday that it had agreed to purchase 88.89 per cent of Bank Ekonomi based in Indonesia for $607.5 million in cash.

"The acquisition will enhance HSBC's commercial banking business in Indonesia, extend the group's presence in the retail banking sector and almost double HSBC's network to over 190 outlets in 24 cities across the country," said a statement.

The transaction was subject to regulatory approvals, added HSBC, a British banking group that is successfully battling against a global financial crisis.

"This acquisition increases our presence in Indonesia, putting us in the top three foreign banks in the country," said Sandy Flockhart, chief executive of HSBC Asia Pacific.

Rakesh Bhatia, chief executive of HSBC in Indonesia, said that the takeover would almost double the British banking group's reach across Indonesia "and provide a firm footing in the commercial and retail banking sectors."

Bank Ekonomi, established in 1989, is listed on the Indonesian stock exchange, has 2,200 staff and 86 outlets across Indonesia, according to HSBC.

It had assets worth about USD 1.8 billion at the end of September 2008.