Oversea-Chinese Banking Corp., Southeast Asia’s second-largest lender by assets, has agreed to acquire Commonwealth Bank of Australia’s Indonesian unit for approximately A$220 million ($142 million).
OCBC, which makes up the bulk of the billionaire Lee family‘s fortune, will acquire CBA’s 99% stake in PT Bank Commonwealth. The deal is expected to close in the second or third quarter of next year, subject to regulatory approvals. OCBC plans to acquire the remaining 1% stake of PT Bank Commonwealth from other shareholders, the lender said in a statement Thursday.
The deal is the first acquisition by OCBC since Helen Wong took over as group CEO in 2021, becoming the first woman to lead the Singapore-based bank. Under the leadership of Wong, who made Forbes Asia’s Power Businesswomen list in 2021, OCBC has positioned itself to capture increased business flows between China and Southeast Asia.
“The acquisition plan aims to strengthen and complement OCBC Indonesia’s capabilities in providing comprehensive financial services, both for the consumer and SMEs segments,” Parwati Surjaudaja, president-director of OCBC Indonesia, said in a statement.
OCBC is interested in PT Bank Commonwealth as it has more than 1.2 million customers and total assets of A$1.8 billion as of June. It concentrates on retail and small and medium-sized enterprises, and has wealth management and automotive financing operations, which can be leveraged to grow OCBC Indonesia’s products and services.
OCBC Indonesia is the fourth largest private sector bank by assets in Indonesia, with a total asset of 247 trillion rupiah ($16 billion) at the end of September. It also has disbursed 144.7 trillion rupiah of loans in the same period, an increase of 10% compared to same period last year.
For CBA, the sale of PT Bank Commonwealth—a non-core business for Australia’s largest bank—is part of a broader strategy of focusing on retail banking in Australia and New Zealand.