HSBC is in the early stages of planning an IPO of its banking business in Indonesia, sources say
- Plans for a share sale in Jakarta are at an advanced stage, said people familiar with the plan
- The plan would meet a promise by the regulator to eventually have HSBC re-list the Indonesian business after it moved in 2015 to fully integrate PT Bank Ekonomi Raharja
Plans for a share sale in Jakarta are at an advanced stage, said people familiar with the plan, asking not to be named discussing an internal matter. It has yet to file a formal IPO application but the local regulator is aware of its intention, they said. A spokesman for HSBC declined to comment. A spokesperson at Indonesia’s Financial Services Authority said the regulator doesn’t comment on corporate actions.
The plan would meet a promise by the regulator to eventually have HSBC re-list the Indonesian business after it moved in 2015 to fully integrate the lender once known as PT Bank Ekonomi Raharja. Indonesia’s watchdog said at the time that this process would likely take several years.
Indonesia’s economy has been gathering pace after emerging relatively unscathed from its latest virus wave, with the government predicting economic growth of 4.8 per cent to 5.5 per cent this year.
Shopping malls and restaurants are full and the digital economy is gaining traction across the nation of more than 270 million people. In January, the value of electronic transactions surged 67 per cent from a year ago, while digital banking activity climbed 63 per cent.
HSBC initially bought 88.9 per cent of Bank Ekonomi for US$607.5 million in 2008, a move that almost doubled its branch network across Indonesia. HSBC’s Indonesian business, which has more than 3,000 employees, booked a profit before tax of about US$129 million in 2021, according to company reports. In 2020, it had 69 branches in 24 cities, it said in its annual report. HSBC offers services in commercial banking, investment banking, wealth and personal banking.
Companies have raised about US$1.2 billion via first-time share sales in Indonesia so far this year, a leap from the US$161 million raised in the same period in 2021, according to data compiled by Bloomberg.
The biggest companies on the Indonesian exchange are PT Bank Central Asia and PT Bank Rakyat Indonesia. Bank Central Asia’s profits climbed 16 per cent last year and the lender is targeting loan growth of 6 per cent to 8 per cent this year.
HSBC operates across 64 countries and regions including China, Singapore, India and Malaysia. Asia, where approximately half of its 220,000 employees are based, contributed about 65 per cent of the group’s reported profit before tax in 2021.