Sticking to the basics

Bank Danamon''s sale of its stake in DBS Vickers Securities Indonesia lets the bank focus on its core business strategy.

Analysts have applauded Indonesia's PT Bank Danamon's sale of its entire 25% stake in local joint-venture securities firm PT DBS Vickers Securities Indonesia to a number of financial institutions for Rp25.7 billion $2.7 million last week.

Proceeds from the divestment will boost earnings and debt service capability, as well as impart upside risk to our full-year forecast, says Brett Williams, a Singapore-based analyst at ING. We interpret the sale, as we did for the divestment in PT Korea Exchange Bank in August, as a commitment to and strategic focus on its core domestic lending franchise.

Indeed, that is precisely what Bank Danamon President Sebastian Paredes...

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