The major shareholder of the project company will be Hana Bank. BIMA’s existing shareholder and IFC will hold minority shareholding in the company.

Hana Bank

Hana Bank is a wholly owned subsidiary of Hana Financial Group (HFG). HFG’s shareholding structure as of December 2006 is as follow: Temasek Holding (9.6%), Goldman Sachs (9.0%), Templeton (6.1%), Allianz (4.7%), Tosca (4.2%), and public (the remaining balance). IFC still keeps 0.15% shares in HFG.

Hana is one of the major players of Korea’s banking industry. Since its incorporation as Hana in 1991, it has successfully completed six merger and acquisitions, making it the third largest bank in Korea. At the end of 2006 Hana had total assets of $118 billion and equity of $7.3 billion and enjoyed ratings of A1 from Moody’s and A- from S&P.

BIMA’s shareholders

- BIMA’s extising shareholders are:
- PT. Trisetijo Manunggal Utama (TMU): 90%
- Mr. Bambang Setijo: 10%

Mr. Setijo is an independent businessman with major interests in textile/garment, chemicals and tires manufacturing. In this connection, he controls 2 listed companies – PT. Indoacidatama Tbk. (producer of ethanol, acetic acid and ethyl acetate) and PT. Pan Brothers Tbk. (apparel).

The total project cost is estimated at nearly $20 million. The proposed IFC investment includes an up to $5 million equity investment in the Bank.

5.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	5.0

* These investment figures are indicative

BIMA is headquartered in Jakarta, Indonesia. It has two branches in Jakarta, one in Tangerang, West Java and one branch in Salatiga, Central Java, Indonesia.

Strengthening and deepening Indonesia banking sector - Entry of a reputable and committed regional financial institution to a developing country that needs good foreign strategic investments will facilitate know how transfer, promote best practices, and introduce new and differentiated products and innovative solutions

Supporting Indonesian banking consolidation process – Hana’s entry to Indonesian banking sector will provide significant growth opportunity for a small undercapitalized local bank. In the long run, the Bank is expected to be a major player in the banking sector which eventually fosters more consolidation. This is in line with Bank Indonesia’s banking consolidation plans.

Further promoting trades – Indonesia – South Korea trade has been growing rapidly. Two-way trade in 2006 reached $10.6 billion, up by 6.2% from 2005. The project is expected to promote further trade relationships between Indonesia and Korea as BIMA would also promote trade products including those involving Korean companies.

Create significant job opportunity – As a small bank, BIMA now only has 100 employees. As Hana plans to grow the Bank’s assets, the Bank will need a substantial increase in number of employees.

IFC creates a good growth opportunity that would not otherwise exist for a small undercapitalized local bank by creating access to a committed foreign strategic partner. BIMA is one of the many small Indonesian banks with capital of less than Rp 100 billion – a minimum capitalization amount required by Indonesia’s Central Bank not later than 2010.

IFC provides important support to Hana as it expands the scope and scale of its operations overseas to become a global player. IFC’s support is important for Hana’s entry to Indonesia, including that Hana relies on IFC’s presence and knowledge of the Indonesian market to identify BIMA, run and hopefully complete the acquisition process.

IFC’s catalytic role in the project allows for Hana’s investment in BIMA. Hana and BIMA’s existing owners would be more confident to collaborate and partner in BIMA if IFC is present as a shareholder in the Bank.

IFC contributes to the strengthening of Indonesia’s banking sector by bringing in best practices, creating differentiated products and services and implementing innovative strategies to be driven by Hana’s management team. In addition, IFC helps in diversifying the base of foreign investors in Indonesian banking sector.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the FI portfolio, for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:

- The IFC FI Exclusion List and/or
- The applicable National Social and Environmental Laws and regulations and/or
- The IFC Performance Standards

IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.

Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC
- Identify responsible, qualified persons to manage and implement the SEMS
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance - Requirements
- Submit a periodic report to IFC as per a format to be provided by IFC