StanChart eyeing Indonesian bank deal

City A.M. Reporter
Standard Chartered and Spain's BBVA are among the banks showing interest in the sale of the Gunawan family's $1.4bn stake in Indonesia's Panin Bank, Reuters sources have suggested.

The 46 per cent stake is on the block with UBS running the auction.

The auction for the Indonesian banking asset is set to heat up with global names StanChart and BBVA joining the race.

The main draw for the foreign banks is the fast growing Indonesian economy, which is expected to stoke credit growth.

"In the next 5 years, under a low interest rate environment and falling government bond yields, we see banks becoming more willing to lend - expanding loan portfolios to 40 percent of GDP," Deutsche Bank said in a recent report.

Deutsche, which estimates the current loan to GDP ratio to be 26 per cent, is forecasting the Indonesian economy will double in the next five years.