Three Arab Banks to Acquire Local Banks Next Year

Monday, 18 December, 2006 | 14:56 WIB

TEMPO Interactive, Dubai: Three banks from the Middle East region will soon realize their plans to acquire several local banks in Indonesia.

“Arab banks are really interested in buying or opening new branches in Indonesia,” said Alwi Shihab. Indonesia’s Traveling Ambassador for the Middle East Region, on the sidelines of the Indonesia Solo Exhibition in Dubai yesterday (12/17).

The three banks include Al-Barakah Islamic Bank (Bahrain), Qatar Islamic Bank and Jordan Islamic Bank.

“They have seriously prepared to acquire small bans in Indonesia,” said Alwi.

Earlier, Bank Indonesia had announced the names of two Arab banks names that intend to acquire Indonesian banks: Al-Baraqah and Qatar Islamic.

According to Alwi, these Arab banks have already signed initial memorandum of understanding agreements with local banks.

“They will possibly proceed to a more concrete process by the beginning of next year,” he said.

In addition, the three banks have already had discussions with Bank Indonesia.

However, Alwi was still reluctant to name which banks will be acquired.

“Small banks. I cannot explain yet.”

Alwi said he considered Indonesian banks were less aggressive than Malaysian ones with the result that more Arab banks have opened branches in Malaysia.

MOHAMAD TEGUH