Commercial and Business

Data Bank Indonesia (BI) mentions five of the 10 largest banks in Indonesia are foreign owned. Ten largest banks that now control the market share to 66 percent.

Meanwhile, four other largest banks are owned Enterprises
State (SOEs) and the remaining private banks.

Based on data presented at Commercial and Business Director of PT Bank Mandiri Tbk, Sunarso, in the event Infobank Outlook 2011, the assets of foreign banks that increasingly dominate.

Based on the source of the financial statements of banks and Bank Indonesia publications, there was a significant increase in performance over the last 10 years or in the period 1999-2009. A significant increase from the composition of assets, loans extended, and third party funds (TPF).

In addition, market share, foreign banks, joint venture banks (joint venture), and national private commercial banks are foreign owned increased significantly from 11.6 percent in 1999 to 45.1 percent during 2009.

Likewise, the amount of loans increased by more than two-fold. In terms of market share rose from 20.3 percent in 1999 to 44.6 percent during 2009. For third-party funding increase from 11.3 percent to 43.5 percent.

Unlike foreigners, the market share of domestic private national banks in the past 10 years (1999-2009) has decreased significantly. In terms of asset composition, a decline from 36.2 percent to 8.5 percent.

The market share of loans disbursed decreased from 23.4 percent to 9.5 percent. Meanwhile, third-party funds was also down from 39.5 percent to 8.9 percent.

Meanwhile, the Regional Development Banks (BPD), the increase is not significant. In terms of asset composition rose from 2.6 percent to 7.9 percent.

Meanwhile, loans disbursed rose from 3.1 percent to 8.3 percent. Funds collected by third parties increased from 2.5 percent to 7.8 percent.

Furthermore, the market share of state banks also tend to fall from 49.5 percent to 38.5 percent. Loans disbursed to 37.6 percent from the previous 53.2 percent, with third-party funds fell from 46.8 percent to 39.8 percent.

The dominance of foreign banks are not separated by the requirements to establish a bank in Indonesia is relatively easy. There are only three requirements
to a foreign bank if you want to establish a bank in Indonesia.

First, foreign banks may take the form of branches, subsidiaries or representative offices (representative office). Second, obtaining approval from Bank Indonesia, and third, the maximum foreign ownership of 99 percent.

The unfortunate, according to him, a growing foreign ownership is significant precisely contrary to the ownership of domestic banks abroad. That’s because each state has strict rules related to the establishment of foreign banks in the country.

Previously, the bank has received approval from the China Banking Regulatory Commission (CBRC) to establish a branch in Shanghai. Permission was obtained after going through the lengthy process for approximately three years since 2007.

Until August 2010, there were 122 commercial banks with details of the four national state form, 66 is a private national banks, 26 regional development banks, 26 foreign banks and joint venture and the 1717 Rural Bank.
translate vivanews


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