Bank of India to buy Indonesia's Bank Swadesi

Bank of India will buy a majority stake in Indonesia's Bank Swadesi early next year, Siti Fadjrijah, deputy governor of Indonesia's central bank said today.

"The SPA (sales and purchase agreement) with Swadesi is likely to be done in the first quarter of 2007," the state Antara news agency said quoting a statement by Fadjrijah on the sidelines of a seminar here.

She said Bank of India was targetting a stake of more than 50% but less than 100% as it "still wanted to maintain a local partner." Bank Swadesi is a small retail bank listed on the Jakarta Stock Exchange.

The two top commissioners of the bank are ethnic Indians. Two Indonesian private companies each hold a 39.52% stake while another 9.48% is held by another private company and the public owns the rest.

It would be the second purchase of an Indonesian bank by an Indian one after the State Bank of India bought a 76% stake in Bank Indomonex last month.