Taiwan's Cathay Financial Holdings mulls raising stake in Indonesian bank

It may complete its due diligence next week.

Taiwan’s Cathay Financial Holdings is conducting due diligence to raise its stake to 51% in Indonesian mid-sized bank Bank Mayapada Internasional, reports Reuters.

Financial Services Authority (OJK) deputy commissioner Slamet Edy Purnomo said Cathay is expected to complete due diligence next week. Cathay, through its arm Cathay Life Insurance, held the biggest stake in the bank at 37.33% by end-2019, whilst Mayapada Group unit PT Mayapada Karunia was the second biggest stakeholder with 26.42%.

Bank Mayapada reported a $5.52m (IDR 79.2b) net profit in Q1, 44.5% down from the same period a year earlier. Its non-performing loan ratio was at 6.94% at end-March, compared to a 2.77% industry average and OJK’s threshold of 5%.

Earlier this year, OJK had approved South Korean lender KB Kookmin Bank increasing its ownership in another mid-sized Indonesian lender Bank Bukopin, which has been facing liquidity problems.

Here’s more from Reuters.

Photo courtesy of Wikimedia Commons.