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UPDATE 1-HSBC says may sell Indonesian bank Ekonomi
May 31, 2013 / 1:11 PM / 4 years ago

UPDATE 1-HSBC says may sell Indonesian bank Ekonomi

LONDON, May 31 (Reuters) - HSBC is considering selling its $670 million stake in PT Bank Ekonomi in Indonesia, potentially unwinding a deal struck five years ago as Europe’s biggest bank continues to slim down and simplify.

HSBC said on Friday it was reviewing its strategic options for its 99 percent stake in Bank Ekonomi after the Indonesia Stock Exchange asked Ekonomi to clarify its position following a bout of market speculation.

If it sells the stake it will reinvest the proceeds in Indonesia, HSBC said.

Chief Executive Stuart Gulliver has sold or closed more than 50 businesses in the last two years and is continuing to shrink the bank by selling unprofitable or sub-scale businesses.

But he has said Indonesia is one of his 22 priority countries, as he focuses on faster growing markets. HSBC’s loan book in the country grew by 61 percent from 2010 to 2012.

The London-based bank paid $607.5 million for an 88.9 percent stake in the Indonesian lender in October 2008, and another $71.6 million in August 2009 for a further 10 percent.

It has a market capitalisation of $674 million, according to Thomson Reuters data, after a jump this month in its illiquid shares.

HSBC has operated in Indonesia since 1884 and had 115 branches there across 10 cities before the purchase. Ekonomi, established in 1989, added another 93 outlets and more than 2,300 staff.

HSBC said at the time of the deal it would enhance its commercial banking business there and make it one of the top three foreign banks in the country.

HSBC made a $306 million profit in Indonesia last year, up from $259 million in 2011, and had 6.5 million customers.

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