With Bank of India (BoI) acquiring a 76 per cent stake in Indonesia's PT Bank Swadesi, its stock rose to a 52-week high at Rs 225.40 intra-day on the Bombay Stock Exchange. It ultimately closed at Rs 223.75.
In its notice BoI has qualified Bank Swadesi as ‘a well run mid sized operating in Indonesia for last 38 years and has 16 outlets.’ It is listed on the Jakarta Stock Exchange.
Reports from Jakarta said that the Bank Indonesia - the central bank of that country - had approved the acquisition. The two sides earlier signed a conditional shares sale and purchase agreement (CSPA) on December 11, 2006. The Inionesian Bank had posted Rs 3.74 crore (Indonesian Rupiah 8.272 billion) of revenues last year.
Bloomberg report says that Indonesia was expecting 40 per cent of its 130 commercial banks to be bought by overseas companies and merged in the next four years. Banks in India are expanding overseas to capitalise on the financing opportunities offered by rising exports and lending to the 25 million Indians who live outside their country.
Bank of India's 76 per cent stake in Bank Swadesi is valued at Rs 74.37 crore (165 billion rupiah or $18.34 million) based on a share price of 700 rupiah on May 24.
Bank Swadesi posted net income of 2.9 billion rupiah (Rs 1.307 crore) in the first quarter had assets of 1 trillion rupiah (about Rs 450 crore) as of March 31, 2007.