Page last updated at 16:57 GMT, Monday, 20 October 2008 17:57 UK

HSBC to acquire Indonesian bank

HSBC sign
HSBC has set its sights on emerging market-expansion

HSBC Holdings, Europe's biggest bank, is to boost its presence in South-East Asia by acquiring Indonesia's Bank Ekonomi for some $680m (397m).

HSBC will buy an 88.9% stake in Bank Ekonomi, which offers commercial and retail banking, for $607.5m in cash.

The deal will almost double HSBC's network in the country - from 105 to 190 outlets - and will make it one of Indonesia's top three foreign banks.

Bank Ekonomi was founded in 1989 and has assets of some $1.8bn.

Under the terms of the deal, HSBC will acquire a 38.8% share of the Asian bank from Lumbung Artakencana, 38.6% from Alas Pusaka and a further 11.5% from individual shareholders.

HSBC Asia's chief executive, Sandy Flockhart, said Bank Ekonomi was a "conservative, well-managed bank".

HSBC has been pursuing acquisitions in emerging markets as more mature Western economies slow down.

Last month it withdrew its $6.3bn offer to acquire a majority holding in Korea Exchange Bank after bank valuations collapsed.

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