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ISLAMIC BANKING | Tony Chua, Indonesia
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StanChart Indonesia seeks to take over Bank Muamalat

The British bank is among the suitors which aims to capitalise surging demand for Islamic banking business in Indonesia.

British-based Standard Chartered is planning to bid for a controlling stake in Bank Muamalat, the oldest Islamic bank in Indonesia, after its local affiliate, Bank Permata, withdrew from the race, sources with direct knowledge of the matter have said. 

Qatar Islamic Bank and Bank Mega were among suitors that submitted second-round bids ahead of last week’s deadline. 

The decision by StanChart, which has been operating in Indonesia for more than 150 years, to pursue as much as a 51 percent controlling stake, valued at almost $300 million, by itself underscores its desire to tap growing demand for Islamic banking business in the world’s most populous Muslim nation. 

Muljono Pringgoharjono, StanChart’s country chief risk officer in Jakarta, said the bank would not comment on the news. “We do not comment on market speculation,” Muljono said in an e-mail to the Jakarta Globe. 

H. Arviyan Arifin, president director of Muamalat, meanwhile, said the stake purchase rested in the hands of the shareholders. “Definitely, the decision rests in the hands of the top shareholders, not with the management, not with us,” he said. 

Bank Danamon — controlled by Singapore state investment company Temasek Holdings — and Bank Tabungan Pensiunan Nasional — backed by US private equity firm Texas Pacific Group — also plan to expand their Shariah business. 

View the full story in The Jakarta Globe.

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