The transaction is expected to be closed in the second or third quarter of 2024, subject to regulatory approvals from the Indonesia Financial Services Authority-Otoritas Jasa Keuangan (OJK) and the Monetary Authority of Singapore (MAS)
Commonwealth Bank of Australia (CBA) has agreed to sell its Indonesian banking subsidiary PT Bank Commonwealth (PTBC) to PT Bank OCBC NISP (OCBC Indonesia).
OCBC Indonesia is a subsidiary of Singapore-based banking and financial services provider Oversea-Chinese Banking (OCBC)
Under the terms of the agreement, CBA will sell its 99% interest in PTBC for an upfront cash consideration of around A$220m ($142m).
The proposed transaction is expected to be completed in the second or third quarter of 2024.
It is subject to conditions including regulatory approvals from the Indonesia Financial Services Authority-Otoritas Jasa Keuangan (OJK) and the Monetary Authority of Singapore (MAS).
Upon completion, the transaction is expected to have a neutral impact on the Group’s Common Equity Tier 1 ratio.
CBA said that the transaction is in line with its strategy to focus on its banking business in Australia and New Zealand.
Also, the Australian lender looks forward to working with OCBC Indonesia over the coming months, for the transfer of ownership.
PTBC is licensed and supervised by the OJK and is engaged in providing a range of banking and wealth management products, with a focus on retail and SME segments.
The Indonesian lender has total assets of around A$1.8bn and net assets of around A$390m, as of 30 June 2023, and serves more than 1.2 million customers.
Established in 1941, OCBC Indonesia is one of the largest banks in Indonesia by total assets.
It has 199 offices in 54 cities in Indonesia and provides a range of products and services to both individual and corporate clients in Indonesia for consumer and SME banking.
With a market capitalisation of around A$2.5bn, OCBC Indonesia is 85% owned by OCBC.
The announcement comes within eight months after PTBC was affected by a cyber-attack involving unauthorised access to project management software, reported Reuters.