Oversea-Chinese Banking Corporation (OCBC Bank), through its Indonesian subsidiary, has agreed to acquire PT Bank Commonwealth (PTBC) for 2.2 trillion rupiahs (US$142 million).

PT Bank OCBC NISP (OCBC Indonesia) has signed a share sale and purchase agreement to acquire 99% of the issued ordinary shares in PTBC from Commonwealth Bank of Australia, and intends to acquire the remaining 1% from the other shareholders.

PTBC focuses on retail and small and medium-sized enterprise segments, providing a range of banking and wealth management products. As of September 30, the bank has a net asset value of 4.1 trillion rupiahs and a net tangible asset value of 3.5 trillion rupiahs.

OCBC Bank says the acquisition deepens its presence in Indonesia. As there is little overlap in customer relationships between the two banks, the deal is expected to create synergies and strengthen the franchise value of its Indonesian unit.

It is envisaged that PTBC will be merged into OCBC Indonesia after the completion of the deal. OCBC Indonesia will be working closely with PTBC on the migration of customers and employees to ensure a smooth transition.

The transaction is subject to regulatory approvals from the Financial Services Authority of Indonesia and the Monetary Authority of Singapore, and other customary conditions.

OCBC Indonesia will use its internal cash to fund the acquisition. The deal is not expected to have any material impact on the net tangible assets, earnings or capital position of OCBC Bank for the financial year ending December 31 2023.