HONG KONG, Jan 8 — PT Bank Rakyat Indonesia, the country’s most profitable lender, has cancelled the sale process for a 40 per cent stake in its life insurance arm, people with knowledge of the matter said.

The state-controlled bank will try to boost the business’s value internally before any future sale, the people said, asking not to be identified as the details are private. Hong Kong billionaire Richard Li’s FWD Group, South Korea’s Hanwha Life Insurance Co and BNP Paribas Cardif were vying for the holding, valued at US$400 million to US$500 million (RM1.7 billion to RM2.19 billion), in an auction process that started nearly a year ago, the people said.

Indonesian companies were involved in US$3.7 billion of acquisitions last year, down 64 per cent from 2014, according to data compiled by Bloomberg. The Bank Rakyat unit, known as BRIngin Life, sells products through the lender’s 10,000 outlets across Indonesia. 

The state lender agreed to take direct ownership of BRIngin Life from its pension fund last year in preparation for the introduction of a foreign partner. It shortlisted bidders in July and initially planned to choose a winner in September, people with knowledge of the matter said previously.

Optimising performance

Bank Rakyat told bidders it may restart the sale in the future, the people said. The life insurance unit, whose full name is PT Asuransi Jiwa Bringin Jiwa Sejahtera, increased its net income 76 per cent in 2014 to 410.4 billion rupiah (RM129.4 million).

“We want to optimise BRIngin Life’s performance,” Hari Siaga, Bank Rakyat’s corporate secretary, said by phone today. “We aren’t thinking about a partner just now — that would be a second step.”

Bank Rakyat shares rose 2.7 per cent to 11,550 rupiah at 2.23pm in Jakarta. A spokesman for Hanwha Life said he couldn’t immediately comment, while representatives for FWD and BNP Paribas declined to comment.

Hanwha Life, South Korea’s oldest insurer, operates in China, Vietnam and Indonesia. FWD, which is part-owned by Swiss Re AG, is part of Li’s Pacific Century Group. It was formed when the billionaire bought ING Grope NV’s insurance and pension units in Hong Kong, Macau and Thailand for €1.64 billion (RM7.8 billion) in 2013. — Bloomberg