ANZ buys RBS in Indonesia

MANILA, Philippines - The Australia and New Zealand Bank (ANZ) has acquired the retail and commercial businesses in Indonesia of Royal Bank of Scotland (RBS).

ANZ chief executive officer Mike Smith said they would invest up to $100 million in capital in Indonesia this year to complete the acquisition of RBS Indonesia and to accelerate organic growth.

Smith said that Indonesia’s economy is resilient due to the government’s management of the economy, its large domestic market, and its relatively low dependence on external trade.

“Economic growth in Indonesia is expected to reach approximately 5.6 percent in 2010. There is no question that Indonesia stands out as a key part of the Asian growth story. We expect urbanization will see more than 50 million people move to cities in Indonesia over the next 20 years, second only in size to China’s urbanization,” the ANZ head told The Asian Banker.

Australia and Indonesia have a trade flow reaching $8.7 billion in 2008, up almost 10 percent on 2007. Australia’s trade in resources, agriculture and infrastructure is expected to continue growing to support Indonesia’s economic development.

Indonesia’s own strengths in natural resources and agriculture will benefit from Asia’s continued growth, which is expected at around seven percent in 2010, excluding Japan.

“Given this, Indonesia will be one of ANZ’s most important markets as part of our objective to become a super regional bank. Our operations here date back almost 40 years and we are a major investor in Indonesia including our interest of approximately 39 percent in PT Panin Bank,” Smith said.

The RBS acquisition plus its organic growth plans should result a total to 28 branches across 11 cities and almost 1,000 full time employees by the end of the year.

In the Philippines, Robinsons Saving Bank acquired the operations of RBS, including its commercial banking license.

RBS has been in trouble since the global credit meltdown two years ago. Similar to a large number of US and European banks, RBS has been forced to sell its overseas assets to raise funds to repay debts incurred.