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JAKARTA. The Group of Hong Kong and Shanghai Banking (HSBC) will inject US$ 1 billion funds and at least US$ 200 million to strengthen the integration between HSBC Indonesia with PT Bank Ekonomi Raharja Tbk (BAEK).
Under the integration scheme, the bank will operate under the new name of PT Bank HSBC Indonesia, which targets the segment of retail credit, as well as small and medium enterprises (SME). To date, the segment of SME is the main business target of Bank Ekonomi. Aside of the two segments, Hong Kong and Shanghai Banking (HSBC) will maintain the segments of corporate business and trade finance, which become the core business HSBC Indonesia. Furthermore, the injection will upgrade the level of the bank to General Bank Business Activities (BUKU) III.
If nothing gets in the way, Bank HSBC Indonesia will broaden its business scope with 100 branches in more than 25 cities. With the global network, HSBC Group has ambition to expand its business at national and global levels.
Previously, Head of Retail Bank & Wealth Management HSBC Indonesia Blake Hellam had confirmed that the integration process is still running according to plan. The consolidation is scheduled to complete in April 2017. Financial Service Authority (FSA), which is the banking regulator, has agreed the plan.
HSBC Indonesia and Bank Ekonomi Raharja have been operating under the HSBC Group. The two banks have decided to build integration to respond to the policy direction of the group’s single ownership. The consolidation includes not only institutional aspect, but also business and human resources aspects.
As a part of the integration, HSBC Indonesia and Bank Ekonomi Raharja will conduct transfer transaction of assets and obligations. The transaction structure is the only suitable transaction method for the conditions of the bank. FSA itself has recommended and approved the transaction method.
As time goes by, all assets and obligations, including all employees attached to HSBC Indonesia will be fully integrated to the integration entity. Under the integration scheme, the integrated bank will have a status as Indonesian legal entity.
As of August 2016, the credit allocation of HSBC Indonesia and Bank Ekonomi Raharja dropped by 22.22% to IDR49.82 trillion and by 5% to IDR19,08 trillion compared with the same period in 2015. (Translator: Muhammad Farid)
