NewIndonesia’s Bank Windu says persuing ‘corporate action’ on talks with China Construction Bank

PT Bank Windu Kentjana International Tbk said on Monday it was pursuing "corporate action" when queried by the bourse about a media report stating it was in acquisition talks with China Construction Bank Corp (CCB) .

Shares of the Indonesian lender rose as much as 18 per cent to a record high on the day of the filing, which came after newspaper Kompas cited a financial services official as saying China’s second-largest bank by assets had submitted a proposal to buy Bank Windu and was looking to acquire another.

CCB and the Indonesian official, Deputy Commissioner for Banking Supervision Mulya Siregar, were not available to comment when contacted by Reuters.

An Indonesian bank deal would be rare for a Chinese state-owned lender, and would add to a string of foreign firms buying into a sector enjoying strong net interest margins relative to Southeast Asian peers.

Meanwhile in China, slowing profit growth has sent banks expanding abroad.

"It is true that there is a corporate action in the company’s business plan, but this is not final yet and it still requires some approvals from the relevant regulator," Bank Windu said.

Foreign banks can own up to 40 per cent of an Indonesian lender. A 40 per cent stake in Bank Windu would be worth around 776 billion rupiah (US$58.02 million) based on current market prices.