Standard Chartered agrees Permata stake sale for $1.3bn

The London-based emerging markets lender and Astra Bank will each sell 44.56% stakes in Permata to Bangkok bank. It said the deal, due to complete by the end of 2020, would leave it to concentrate on its own business in Indonesia and support its capital strength.

The price, to be paid in cash, is 1.77 times Permata's book value. The bank will book a gain of $0.5bn from the sale, adding $0.1bn to its tier 1 capital. The deal will reduce Standard Chartered's risk-weighted assets by $9.5bn and increase its tier 1 capital ratio by about 50 basis points.

Bill Winters, Standard Chartered's chief executive, said: "The sale of our stake in Permata will allow us to focus on our wholly owned business in the large and strategically important Indonesian market and will release capital for reinvestment or return to shareholders. This transaction further demonstrates our focus on executing the refreshed strategic priorities we announced earlier this year, at pace."

Standard Chartered has held a stake in Permata since 2004. Some shareholders are pushing Winters for faster progress in improving Standard Chartered's performance four years after he took over. A month after saying he was still digging through "fertiliser" he announced a new plan to boost growth in February and said Permata was no longer a core business.