Australia’s largest lender CBA weighs Indonesia unit sale

COMMONWEALTH Bank of Australia (CBA) is considering selling its Indonesian unit, people familiar with the matter said, a move that would help the lender raise cash while exiting a non-core market.

Australia’s biggest bank by market value is working with a financial adviser to help gauge interest in PT Bank Commonwealth, the people said, asking not to be identified because the matter is private. A sale could value the assets at several hundred million dollars and attract interest from other regional lenders seeking to expand in South-east Asia’s biggest economy, the people said.

Bank Commonwealth focuses on retail banking as well as financial offerings for small-to-medium enterprises in Indonesia, according to its website. It also provides wealth management services.

Considerations are preliminary and CBA could still decide against pursuing a deal, the people said. A representative for CBA declined to comment.

A sale would follow CBA’s disposal of Bank Commonwealth’s life insurance arm, which it agreed to sell to billionaire Richard Li’s FWD Group Holdings for A$426 million (S$390 million) in 2018. The deal was completed almost two years later. As part of the transaction, Bank Commonwealth signed a 15-year life insurance distribution agreement with FWD.

CBA first opened a representative office in Indonesia back in 1992, followed by a joint venture to provide corporate banking services to local companies five years later. In 2000, the Australian bank became a majority shareholder in the venture, which then became Bank Commonwealth, and has since expanded both organically and via acquisitions. It had total assets of 20 trillion rupiah (S$1.8 billion) as of April 2021. BLOOMBERG