The Indonesian subsidiary of Oversea-Chinese Banking Corporation, PT Bank OCBC NISP Tbk (OCBC Indonesia), has agreed to buy Commonwealth Bank of Australia&rsquo s (CBA) 99% stake in CBA&rsquo s Indonesian banking subsidiary, PT Bank Commonwealth (PTBC).
OCBC Indonesia will pay an upfront cash consideration of approximately A$220 million ($192.3 million).
While CBA has been involved in the growth of PTBC since 1997, the sale of its stake is in line with the bank&rsquo s strategy to focus on its banking business in Australia and New Zealand moving forward, says CBA in an announcement on the Australian Exchange (ASX). &ldquo CBA looks forward to working with OCBC Indonesia over the coming months on the transition of ownership,&rdquo adds the Australian bank in its Nov 16 statement.
The completion of the transaction is subject to several conditions including regulatory approvals from the Monetary Authority of Singapore (MAS) and the Indonesia Financial Services Authority (Otoritas Jasa Keuangan or OJK).
It is slated to be completed around the second or third quarter of 2024.
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The transaction is also expected to be broadly neutral to CBA&rsquo s common equity tier 1 (CET-1) ratio.
PTBC is CBA&rsquo s 99%-owned subsidiary. The bank focuses on the retail and small- and medium-sized enterprise (SME) segments with a range of banking and wealth management products. PTBC has over 1.2 million customers with total assets of A$1.8 billion and net assets of A$390 million as at June 30.