Despite some foreign banks choosing to exit or sell parts of their businesses in Indonesia, many foreign banks continue to sustain and even expand their operations in the country.
Some foreign banks even acquire local banks, such as Sumitomo Mitsui Banking Corporation acquiring PT Bank Tabungan Pensiunan Nasional Tbk. (BTPN), Industrial Bank of Korea acquiring PT Bank Agris Tbk., and Mitsubishi UFJ Financial Group acquiring PT Bank Danamon Indonesia Tbk.
Foreign banks sustaining in Indonesia employ several strategies, including:
- Focusing on market segments aligned with their expertise and competitive advantages, such as corporations, trade finance, treasury, or wealth management.
- Enhancing innovation and digitalization for faster, easier, and cheaper customer service, as well as reducing operational costs.
- Establishing partnerships and synergies with local banks through acquisitions, joint ventures, or strategic alliances to expand networks and market penetration, leveraging existing resources and infrastructure.
- Adapting to prevailing regulations and government policies, contributing to national development programs such as SMEs, infrastructure, and financial inclusion.
The prospects for foreign banks in Indonesia remain promising due to the vast and dynamic market potential, coupled with opportunities arising from economic and social developments in Indonesia.
Foreign banks are also expected to benefit the banking industry and the Indonesian economy by enhancing service quality, competition, and innovation, as well as attracting foreign investment, technology, and capital.
