Indonesia’s largest bank eyes Philippines branch

MANILA, Philippines — Jakarta-based Bank Mandiri has expressed interest to put up a branch in the Philippines four years after the country’s banking industry was fully opened up to foreign banks almost four years ago.

Representatives of the largest state-owned Indonesian bank recently met with Finance Secretary, and Monetary Board member, Carlos Dominguez III as well as officials of the Bangko Sentral ng Pilipinas (BSP).

Bank Mandiri was established in October 1998 as part of the bank restructuring program of the government of Indonesia. Four state-owned banks – Bank Bumi Daya, Bank Dagang Negara, Bank Exim, and Bapindo – were amalgamated into Bank Mandiri in July 1999.

It is the biggest bank in Indonesia in terms of assets, loans, and deposits. Total assets of the bank stood at $75.46 billion and net profit was $1 billion in 2016.

Bank Mandiri employs around 38,000 employees and oversees six major subsidiaries: Bank Syariah Mandiri, Mandiri Sekuritas, Mandiri Tunas Finance, AXA Mandiri Financial Services, Bank Sinar Harapan Bali, and Mandiri AXA General Insurance.

If approved by the BSP’s Monetary Board, Bank Mandiri would be the first Indonesian bank to open a branch in the Philippines.

BSP Deputy Governor Chuchi Fonacier had said more foreign banks are looking to set up branches and representative offices in the Philippines on the back of the country’s sound macroeconomic fundamentals.

The central bank has allowed 12 foreign banks to open branches in the Philippines since former president Benigno Aquino III signed Republic Act 10641 or An Act Allowing the Full Entry of Foreign Banks in July 2014 which removed the limit in the number of foreign banks that can enter in the country.

These include Taiwan’s Hua Nan Commercial Bank Ltd., Cathay United Bank, Yuanta Bank, First Commercial Bank, and Chang Hwa Bank Commercial Bank Ltd.; Korea’s Shinhan Bank, the industrial Bank of Korea, and Woori Bank; Sumitomo Mitsui of Japan; United Overseas Bank Ltd. of Singapore, CIMB Bank of Malaysia, and Beijing-based Industrial and Commercial Bank of China (ICBC).

Likewise, the BSP has given 13 foreign banks the green light to establish representative or liaison offices in the country.

These are State Bank of India, Ogaki Kyoritsu Bank Ltd, Wells Fargo Bank, Korea Development Bank, Bank of Singapore Ltd., DBS Bank Ltd, Japan Bank for International Cooperation, Rothschild (Singapore) Ltd., The Bank of New York Mellon, Korea Eximbank, UBS AG, state-run Bank of Taiwan, and Zurich-based Credit Suisse.