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Singtel acquires 16.26% stake in Indonesian bank for $48 mil to pursue banking opportunities in the country

Felicia Tan
·2-min read

Indonesia is home to Asean’s largest unbanked and underbanked population.

Singapore Telecommunications Limited (Singtel) announced, on Jan 21, that it has acquired a 16.26% stake in Indonesian bank, PT Bank Farma International for a cash consideration of 500 billion rupiah ($48.0 million).

The acquisition was made by the telco’s wholly-owned subsidiary Singtel Alpha Investments, where 2.4 billion new shares were acquired in the bank.

The cash consideration was determined through a privately negotiated process and was funded via internal sources.

As at June 30, 2021, Fama’s unaudited net asset value (NAV) stood at 1.04 trillion rupiah.

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The acquisition, according to Singtel, was made to pursue banking opportunities in Indonesia, which is home to Asean’s largest unbanked and underbanked population.

Fama is majority-owned by a subsidiary of Elang Mahkota Teknologi Tbk, an Indonesia Stock Exchange (IDX) listed media and technology conglomerate. Fama also counts NASDAQ-listed Grab Holdings as one of its investors.

“With their strong track record in financial services and lifestyle services, the investors will bring significant capabilities and insights from an extensive customer base to develop Fama’s digital banking proposition and drive greater financial inclusion,” says the statement put out by Singtel on Jan 21.

“This latest investment in digital banking is consistent with Singtel’s strategic reset of riding digital growth trends to build sustainable new businesses across Asia, particularly in markets where the group has a strong presence,” it adds.

This is not Singtel's first foray into digital banking. In December 2020, a consortium comprising Grab and Singtel secured a digital full bank license from the Monetary Authority of Singapore). The same consortium had also applied for a digital banking licence in Malaysia in July 2021.

Shares in Singtel closed flat at $2.47 on Jan 20.

Photo: Bloomberg

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