Oversea-Chinese Banking Corp’s Indonesian unit is establishing a private-banking business to tap into the billions of dollars of assets newly declared by wealthy individuals ahead of the expiry of a tax amnesty.
PT Bank OCBC NISP is awaiting approval from Indonesia’s financial services authority, known as OJK, before it launches its private bank, Parwati Surjaudaja, the lender’s Jakarta-based president director, said on Thursday in a reply to questions sent via text message.
“The tax amnesty has created new momentum for the wealth-management industry,” she said in a separate e-mail. “It is becoming a necessity for banks here to be able to offer a variety of customised wealth products that suits the needs of our Indonesian customers.”
The nine-month amnesty, which expires on March 31, offered Indonesians an opportunity to come clean on assets previously hidden from tax authorities and is a key revenue source for President Joko Widodo’s spending plans. The effort has so far prompted individuals to report 4,514tn rupiah ($338bn) in previously undeclared funds, a quarter of which is harboured outside the country, finance ministry data show.
OCBC NISP is among 21 government-approved banks that are allowed to handle the newly declared funds, including moving the money back to Indonesia and investing it. The lender, which operates more than 330 branches and offices, and also runs a wealth-management service, had collected 7tn rupiah in repatriated funds by December 31, Surjaudaja said.
Its parent has a separate private-banking arm known as Bank of Singapore, which managed $79bn in assets as of December 31. Wealth management and private banking has been a key area of expansion for Singapore-based OCBC, which acquired Barclays Plc’s wealth units in Hong Kong and Singapore last year.
OCBC NISP, previously known as Bank NISP, is the fourth-oldest bank in Indonesia, according to its website. OCBC became a controlling shareholder in 2004 and currently owns an 85.1% stake, the website showed.
Oversea-Chinese Banking Corp’s Indonesian unit is establishing a private-banking business to tap into the billions of dollars of assets newly declared by wealthy individuals ahead of the expiry of a tax amnesty.
