The phrase “dog in the manger” comes to mind. Rp 64 trillion investment could have helped cushion the Rupiah’s fall and checked some capital flight, reassuring investors that Indonesia is a good place to do business. And what for? Sabre rattling? National pride?
People pass by a Bank Mandiri branch in Jakarta, Friday, August 2. (JG Photo/Jurnasyanto Sukarno)
Budi Gunadi Sadikin, the head of Indonesia’s largest bank, said his home market is more attractive than Singapore less than a month after Indonesian efforts to get access to the city state scuttled what would have been Southeast Asia’s biggest banking takeover.
“It is more important for the Singaporean banks to get into Indonesia” rather than the other way round, said Sadikin, president director of Bank Mandiri, referring to his country’s underpenetrated banking sector and Singapore’s smaller economy and population. “Singapore to us is a small opportunity,” he said in an interview last week.
Indonesia’s central bank has been seeking reciprocity in Singapore for the nation’s biggest banks, including Mandiri, the largest by assets. At the same time, Indonesia last year imposed foreign ownership limits that prompted Singapore’s DBS Group Holdings to drop its 66.4 trillion rupiah ($6 billion) acquisition of Bank Danamon Indonesia.
If the Monetary Authority of Singapore showed a “positive gesture” in granting greater access to Indonesian banks, “then the transaction would have gone smoothly,” Sadikin said.
He would still be “very happy” for Jakarta-based Mandiri to receive a full banking license in Singapore.
“I won’t open 25 branches in one year,” Sadikin said. “But at least I have the flexibility.”