Standard Chartered wins Permata stake

Indonesia has picked a partnership led by Standard Chartered as the winning bidder for a 51 per cent stake in Permata, the country's seventh-largest bank. The stake is valued at about 2.77 trillion rupiah (£190m). Standard Chartered teamed up with Indonesia's largest car retailer, Astra, after failing in two previous bids for local banks.

The London-based bank beat three offers from consortia including Malaysia's two biggest banks, Malayan Banking and Bumiputra Commerce Bank, and Indonesia's Bank Panin, which submitted final bids by Thursday's deadline. Singapore's biggest lender, United Overseas Bank, had withdrawn.

It is the last bank sale by the Indonesian government, which is trying to plug a widening budget deficit.

Bryan Sanderson, the chairman of Standard Chartered, said: "Permata is one of Indonesia's best-run banks, with excellent prospects in consumer banking and in the small medium enterprise sector." Standard Chartered and Astra will each get a 25.5 per cent stake in Permata once a purchase agreement with the state-owned asset management agency is reached and Bank Indonesia has given approval. The acquisitionis expected to be completed in late November.

Previous attempts by Standard Chartered to buy Indonesian banks floundered amid protests by Indonesian workers who, worried about job losses, went on strike. In 2002, it lost out to Farallon Capital Management, a US hedge fund, in its quest to buy Bank Central Asia - a defeat that m irrored a failure in 1999 to acquire Bank Bali.

When asked about possible job cuts, a spokesman for Standard Chartered said Permata would continue as a separate entity, and that Standard Chartered was seeking to grow in China, South Korea, India, Indonesia and South Africa.