Temasek changing its mind over PT Bank?

Temasek Holdings, Singapore's sovereign wealth fund, said it may sell its stake in PT Bank Internasional Indonesia, reversing from an earlier preference for a merger of its two Indonesian banks.

The Singapore fund has to either sell or merge Bank Internasional with PT Bank Danamon Indonesia to meet an ownership rule imposed by the Indonesian central bank. Temasek also owns a stake in Bank Danamon, Bank Internasional's bigger rival.
“The sale plan is a good move,'' said Made Suardhini, a banking analyst at PT Mandiri Sekuritas in Jakarta. “Merging may not add value to the banks because their businesses overlap.”

The sale of Bank Internasional may allow Temasek and its partners to profit from an investment that has risen by about fivefold since they first paid 1.99 trillion rupiah ($218 million) for a 51 percent stake in Bank Internasional in 2003. The partners include South Korea's Kookmin Bank.

Temasek is “exploring the sale of our investment in Bank Internasional Indonesia,” Myrna Thomas, the company's spokeswoman, said in an e-mailed statement. “Our final decision will be based on what optimizes value for our shareholder. We remain optimistic about the prospects for Indonesia's financial services sector.” Temasek's shareholder is Singapore's Ministry of Finance.

The Singapore sovereign wealth fund said on December 13 it planned to merge the two banks. Temasek also said at the time it may consider a sale if the merits of a merger aren't compelling enough.

Bank Internasional, Indonesia's sixth-biggest bank by assets, gained 3.1 percent to 330 rupiah in Jakarta. Bank Danamon is the nation's fifth-largest bank.

Temasek has until 2010 to comply with Bank Indonesia's ownership rules for the country's lenders.

What will Temasek ultimately choose to do?