CIMB, Malaysia's No 2 bank, and J Trust have expressed interest, and are looking at submitting binding bids, the sources said. Both companies have banking units in Indonesia. (Photo by The Edge)

SINGAPORE (Oct 31): Malaysian bank CIMB and Japanese finance company J Trust are among firms vying to buy Indonesia's PT Bank Commonwealth in a deal that could value the lender at US$400 million (RM1.91 billion) to US$500 million, two sources with knowledge of the matter said.

Bank Commonwealth, which is 99% owned by Australia's biggest lender Commonwealth Bank of Australia (CBA), focuses on retail lending as well as corporate banking services for small and medium enterprises.

Morgan Stanley, the financial adviser on the sale, has asked bidders to submit binding offers by early November, the sources added, declining to be identified as the planned sale had not been publicly disclosed.

CIMB, Malaysia's No 2 bank, and J Trust have expressed interest, and are looking at submitting binding bids, the sources said. Both companies have banking units in Indonesia.

Bank Commonwealth, CIMB, J Trust, CBA and Morgan Stanley declined to comment.

The lender, which also provides wealth management services, had total assets of 18.39 trillion rupiah (US$1.1 billion or RM5.52 billion) last year, according to its annual report.

It logged a loss of more than 350.77 billion rupiah in 2022, more than double a year earlier, the report said, citing challenges posed by the Covid-19 pandemic.

It was first established in 1997 as a CBA venture with Bank International Indonesia. CBA became its controlling shareholder in 2002 and changed its name to Bank Commonwealth.

Interest in Bank Commonwealth comes at a time when growth in Indonesia, Southeast Asia's largest economy, is expected to slow after accelerating at its highest rate in three quarters in the April-June period.

Merger and acquisition activity in Southeast Asia dropped 34% to a seven-year low of US$88.9 billion in the first nine months of this year, with activity for the region's financial sector sliding 66% to US$9.8 billion, LSEG data showed.

Most Australian retail banks have been doing away with non-core operations to focus on services at home.

CBA sold a 10% stake in China's Bank of Hangzhou last year for about A$1.8 billion (RM5.46 billion) to entities controlled by the Hangzhou municipal government.