In recent years, several foreign banks decided to exit or sell parts of their businesses in Indonesia. Here’s the chronology and reasons for some of these cases:
- In 2018, PT Bank ANZ Indonesia divested its wealth management and retail banking business to PT Bank DBS Indonesia. ANZ’s reason was to focus on institutional banking in Indonesia and the Asia-Pacific region.
- In 2019, PT Bank Rabobank International Indonesia ceased operations in Indonesia after failing to obtain OJK’s approval for a merger with PT Bank Andara. Rabobank’s reason was to divert resources to global food and agribusiness.
- In 2020, PT Bank Permata Tbk. was acquired by Bangkok Bank Public Company Limited after previously being jointly owned by PT Astra International Tbk. and Standard Chartered Bank. Standard Chartered aimed to enhance capital efficiency and support growth strategies in Asia, Africa, and the Middle East.
- In 2021, PT Bank Commonwealth was sold to PT Bank OCBC NISP Tbk., previously owned by the Commonwealth Bank of Australia. Commonwealth Bank aimed to become more efficient and focused on domestic business in Australia and New Zealand.
- In 2021, PT Citibank N.A. Indonesia sold its consumer banking business to PT Bank UOB Indonesia. Citibank aimed to refocus on institutional banking in Indonesia.
From these cases, it’s evident that the primary reasons for foreign banks to exit or sell parts of their businesses in Indonesia are to optimize their global or regional business strategies and enhance capital and operational efficiency.
Moreover, foreign banks face stiff competition with local banks, especially in the consumer and SME segments, requiring extensive networks and low costs.
Foreign banks also need to adapt to evolving regulations, such as foreign ownership limits, requirements for national payment system implementation, and minimum capital requirements.
