HSBC’s Indonesian subsidiary Bank Ekonomi to delist from the Indonesia Stock Exchange
HSBC plans to integrate Bank Ekonomi, the Indonesian bank it majority owns, with its main operations in the country due to the illiquidity of shares.
Bank Ekonomi, in which HSBC has a 99 per cent stake, has said it will delist from the Indonesian Stock Exchange from the start of Tuesday trading.
"Bank Ekonomi has requested that the trading of its shares be suspended by the Indonesia Stock Exchange with effect from the commencement of trading tomorrow," it said in a statement to the London Stock Exchange. "As a result of the above, HSBC will plan for an integration of the business operations of Bank Ekonomi and HSBC's Indonesian branch, subject to, amongst other things, applicable laws and regulations."
Two years ago, HSBC mulled selling its stake in Bank Ekonomi, as it explored ways of cutting costs during the fallout from the sovereign debt crisis that had gripped Europe.
The bank originally paid $607.5m (£395m) for an 88.9 percent stake in the Indonesian lender in October 2008, followed by another $71.6 million (£47m) in August 2009 for an additional 10 percent.
At the time, HSBC said the deal would bolster its commercial banking business, as well as making it one of the top three banks in Indonesia.