Indonesian bank wants regional 'level playing field' before ASEAN 2015

PT Bank Mandiri, Indonesia’s biggest bank by assets, said it welcomes Bank Indonesia’s plan to cap investor ownership in Indonesian commercial banks at less than 50% as it will help level the playing field with regional rivals.

“We need to have a more reciprocal policy with other countries,” Mandiri Managing Director Pahala N. Mansury said in an interview. “If other banks coming from other countries can establish their presence here, why is that we are not allowed” to do the same in their countries?

Mandiri is aiming to become one of South East Asia’s five biggest banks in terms of market capitalization by 2014, a year before ASEAN plans to shed investment and trade restrictions. Of the top five banks now, three are Singaporean and two are Malaysian.

For banks in Malaysia, collective foreign ownerhsip cannot exceed 30%, said Wee Siang Ng, director and regional head of ASEAN Financials at BNP Paribas Securities (Singapore). Within this, a single foreign corporation can hold a maximum of 20%, and a foreign individual, 10%.

“For Singapore banks, there is no explicit cap on foreign ownership,” Ng said. “Investors, however, have to get approval from the regulator if they want to increase their stake beyond three pre-designated thresholds.” These thresholds are at 5%, 12% and 20%, he said.