Indonesia: New banks, same old owners…
Euromoney Limited, Registered in England & Wales, Company number 15236090
4 Bouverie Street, London, EC4Y 8AX
Copyright © Euromoney Limited 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Southeast Asia

Indonesia: New banks, same old owners…

Though the banking battleground in fast-modernizing Indonesia is new, the combatants include some of its oldest and most controversial business clans.


Go-getting Indonesians like to say ‘di mana ada kemauan, di situ ada jalan’, a proverb that translates as ‘where there’s a will, there’s a way’.

It’s an optimistic maxim that might well describe the national spirit behind Indonesia’s re-emergence as a regional democratic and economic powerhouse after its near collapse during the Asian financial crisis almost 20 years ago to the day.

But it’s another time-honoured saying in French – ‘plus ça change, plus c’est la même chose’, or ‘the more things change, the more they stay the same’ – that might be more apposite for three emerging Indonesian banks, two decades after the lending practices of their owners helped plunge Indonesia into that crippling crisis in the late 1990s.

That’s because three of the more controversial corporate clans of the old Suharto-era Indonesia – the Salims, the Riadys and the Widjajas, names many Indonesians thought would never again own and run a bank – are back and, well, owning and running Indonesian banks.

Following a $40 million deal in March, the Salim Group told reporters in Jakarta that it had taken control of Bank Ina Perdana, marking the family’s first foray back into the industry since they lost control of Bank Central Asia during the crisis.

It’s a similar story with Mochtar Riady and his family, which owned Lippo Bank until it was taken from their control by the IMF-backed Indonesian Bank Restructuring Agency during the crisis. The Riady family now owns Bank Nationalnobu, or Nobu Bank, which Mochtar says will be turned into a digital bank. 

What is important is how to enter digitalization - Anthoni Salim, Salim Group

As for the Widjaja family, not only was their Bank Internasional Indonesia (BII) seized and recapitalized by the IBRA during the Asian financial crisis, but their flagship company Asia Pulp & Paper subsequently made headlines with the biggest bond default in the emerging markets. The Widjaja clan now owns mid-sized Bank Sinarmas, which is also rolling out a digital platform.

For the moment at least, all three lenders are tiny compared with the banks that the three families previously owned. BCA, Lippo and BII were among the biggest banks in the private sector in pre-crisis Indonesia. 

At the time, family-owned conglomerates typically had in-house banks to handle payments related to the various divisions and staff, as well as any intra-group business, with branch networks in those parts of the archipelago where the family had their main commodity or other interests. During the crisis, bank runs and revelations of excessive intra-group lending resulted in their being taken over and recapitalized. 


There are big ambitions for the three families’ new banks, particularly in fintech, and many of the same people from the old banks have been placed in influential management positions in order to fulfil them.

Take the composition of the boards of the Widjajas’ Bank Sinarmas and the Riadys’ Nobu Bank.

The Bank Sinarmas board and senior management ranks are littered with former officials of the Widjajas’ failed BII, which faltered after it was revealed that more than half of its loans had been made to Widjaja group companies, in what was a clear violation of rules on intra-group lending.

Mochtar Riady, Nobu Bank

There’s Freenyan Liwang, Bank Sinarmas’ president-director, or chief executive, since 2010. Now 56, Liwang began his banking career in the credit card division of the Widjajas’ BII in the early 1990s. His official CV as published on Bank Sinarmas’ website also describes him serving from 1994 to 2010 as deputy general manager of Bank Internasional Ningbo, a Widjaja-owned bank in China’s Zhejiang province.

Another Bank Sinarmas director is Soejanto Soetjijo. According to the bank’s website, “he began his career through the management development programme in Bank Internasional Indonesia in 1989. Throughout his career in BII, he held various positions, such as accounts officer, credit analyst, credit remedial team member, deputy branch manager, until becoming a branch manager.” These BII details do not appear on his LinkedIn profile.

And so it goes through the Bank Sinarmas board, which at times looks like a home for former Widjaja operatives of the defunct BII. There is 57-year-old Hanafi Himawan, who is also listed as an independent director at Sinarmas Bank despite spending 20 years at BII (a career note that is also missing from his LinkedIn page).

 And there’s 51-year-old director Heru Agus Wuryanto, who started at BII in 1995 and has worked for the Widjajas ever since. The bank says he passed a fit and proper test by the central bank of Indonesia before joining the Bank Sinarmas board.

Director Loa Johnny Mailoa’s official bank biography describes him as starting his career at the Widjajas’ BII in 1997, and working there until 2005. Another director, who goes by the single name of Halim, is described as working with BII for 17 years before moving to Bank Sinarmas.


The Widjajas’ Bank Sinarmas and the Riady-controlled Nobu Bank both seem to have adopted a liberal interpretation of what constitutes an independent director on their boards. 

As Jamie Allen, secretary-general of the Asian Corporate Governance Association (ACGA) in Hong Kong, points out, this is a weakness in Indonesia and some other countries in the region.

“Unfortunately, most rules on independent directors in Asia allow people quite closely connected to the founding family or management to be considered ‘independent’, usually after a fairly short cooling-off period,” Allen says, pointing out that Indonesia follows the Dutch two-tier board system, not the English unitary or single board system. 

Anthoni Salim, Salim Group

“In Indonesia, the cooling-off rule is six months for independent ‘commissioners’,” he says. “Other aspects of the independent commissioner definition in Indonesia are not too bad, but the short cooling-off period is a problem in our view.” 

He also points out an unusual feature relating to boards of directors in Indonesia: “Although all of the members are executives, in other words, have full-time jobs at the bank, they are also required to have one director who is ‘independent’. This looks like a contradiction in terms, since executive directors by definition cannot be independent of management and/or the controlling shareholder. They report to them.

But what this means in Indonesia is that at least one executive must come from outside the controlling family and not have links to them.”

Indonesia ranks last out of 11 Asian markets in the ACGA’s Corporate Governance Watch survey.

While some of the reforms introduced by Indonesia look pretty good on paper, “the problem is implementation and weak enforcement by the regulator,” Allen says.

“A major lesson from the Asian crisis is that material related-party transactions can be poisonous to good corporate governance and, if they occur in banks, can create systemic risk. Having connected directors or commissioners posing as independents on your board should not be allowed. The OJK (the financial services authority) should take a closer look.”

Bank Sinarmas’ compliance director is Salis Teguh Hartono. He’s listed by the bank as an independent director despite a long career spent inside the Widjaja empire. As the bank says on its website: “In 1995, he joined PT Bank Internasional Indonesia as relationship manager and as branch manager in 1998. His career continued in the Sinar Mas Group agribusiness division as senior manager from 2002 to 2005. He joined Bank Sinarmas in September 2005 as credit and marketing group head” and was appointed group head of compliance the following year. 

Bank Sinarmas is a division of Sinar Mas Multiartha, the financial services division of the Widjajas’ Sinar Mas group: three members of the Widjaja clan are commissioners of that division, including Indra Widjaja, the family member who was in charge of BII when it made excessive related-party loans and had to be rescued. 

Prior to 1998, people owned banks because they wanted to get access to funding. After 2000, they own a bank because they want to have their share price acceleration increase because of bank performance - Kartika Wirjoatmodjo, Bank Mandiri

At the Riady-owned Nobu Bank, all three members of its main board of commissioners are described as independent.

Nobu Bank’s independent main commissioner, or chairman, Adrianus Mooy, is a former central bank Indonesia governor from the Suharto era, when the Riady clan forged the bulk of their business empire.

Mooy also has other links with the Riady business empire. He was been an independent director of two other Riady companies: retail giant Matahari and property development arm Lippo Karawaci. Mooy has also been a senior adviser to Jakarta’s Pelita Harapan University, which is the Christian college founded in 1994 by James Riady, son of the 88-year-old patriarch Mochtar Riady.

Nobu Bank lists two other independent directors, Dewi Pandamsari and Tjindrasa Ng. Both have worked for many years for the Riady family businesses.

An official Nobu Bank document describes 55-year-old Pandamsari as having started her banking career in 1989 as a legal officer at the Riady’s old Lippo Bank. The document says she worked at various levels, including legal division head, legal group head and compliance and legal group head.

The same document states that Ng started his banking career at the forerunner of Lippo Bank and then served “in various positions in the field of credit supervision.” He’s been a Lippo Group adviser since 2009, the Nobu Bank document says. 

Mooy, Pandamsari and Ng are three of the five members of Nobu Bank’s audit and risk monitoring committees. Mooy and Ng are two of the three on Nobu Bank’s remuneration committee.


Despite the distaste in Indonesia in the wake of the 1990s financial crisis for intra-group relationships, Nobu Bank’s 2016 annual report indicates that 25 of the main companies in the Riady empire have accounts at the bank, as well as James Riady and the patriarch, Mochtar.

Like the Widjajas’ Bank Sinarmas, with its multitude of ex-BII staffers, the Nobu Bank board of directors is stacked with former executives of the Riadys’ Lippo Bank.

There’s Januar Angkawidjaja, who joined Lippo in 1993, according to his LinkedIn profile, and Hendra Kurniawan, who started there in 1984. Another director, Lim Migi Trisnadi Elias, a graduate of Riady’s Pelita Harapan University, joined Lippo in 1989. Still another, Winardi Darmansa Lim, joined Lippo Bank in 1989, and served at one point in Bank Lippo’s Cayman Island branch.

Another Nobu Bank director that the bank has described as an independent director is Hadiah Herawatie: she was a commissioner (director) of the family’s Lippo Bank from 2002 to 2003.

Neither Nobu Bank nor Bank Sinarmas responded to Asiamoney’s requests to speak about their new banks, their strategies and their governance.

At the Salim’s Bank Ina Perdana, current chief executive Edy Kuntardjo has the air of a man who knows he won’t be running one of Indonesia’s smaller publicly listed banks too much longer. At 60, he’s been Bank Ina’s president director since 2011, when he joined it from the Indonesian offshoot of South Korea’s Hana Bank.

Much of Kuntardjo’s early career as a banker was with a state-owned trade bank Bank Dagang, one of the four struggling banks that the government merged at the height of the 1990s crisis to become Bank Mandiri. Pak Edy, as he’s known, hadn’t worked for the Salims until they bought control of Bank Ina Perdana in March. 

Listed on the Jakarta stock exchange since 2014, Bank Ina is one of the country’s smallest banks. Pak Edy says the bank has assets of just $85 million. The retail-oriented bank has around 300 staff working in 23 branches mostly in the largest cities across Java, Indonesia’s most populated island.

The Salims own one of Indonesia’s largest business conglomerates, centred on the instant noodle Indofood and the national convenience retailer Indomaret. Bank Ina has a modest online presence, but Kuntardjo tells Asiamoney that the Salims’ intention is to use it as a digital banking vehicle for Salims’ “captive market” of their estimated 500,000 employees in the country.


Salim patriarch Soedono Salim, better known outside Indonesia as Liem Sioe Liong, died in 2012 aged 95 in Singapore, the country where he had fled in 1998 as anti-Chinese pogroms swept through Indonesia, burning the family home in Jakarta. Such was the depth of feeling about the Salims in Indonesia that in 2002, Laksamana Sukardi – who was the powerful state enterprises minister at the time – threatened to resign if the Salims bought back Bank Central Asia.

The group has long been managed by Salim’s son Anthoni who stayed in Indonesia to rebuild the empire after the family had to give up control of Bank Central Asia. Anthoni Salim declined to be interviewed for this article, but in a press briefing in June, he told reporters that the group’s Bank Ina play is not designed to restore banking to the centre of the Salim group in the way that BCA was core to the group pre-crisis – and with disastrous effect.

“What is important is how to enter digitalization,” Salim told reporters.

That’s a sentiment similarly expressed by the Riady family, which also has stakes in a range of regional tech startups, such as the ride-hailing service Grab, an Asian competitor to Uber. 

After buying into Nobu Bank, James Riady told the Nikkei Asian Review: “We must have inward creative disruption so that we can be transformed into a new area of growth, which is the digital economy.”

So, as the old families get back into banking, is this a back-to-the-future moment for Indonesia?

Kartika Wirjoatmodjo – chairman of the Indonesian Banks Association and chief executive of state-owned Bank Mandiri, Indonesia’s biggest bank – believes that there’s been a profound attitudinal change among today’s bank owners, compared with how private banks were run in the lead-up the crisis of the late 1990s.

One of Indonesia’s most respected civil servants, Wirjoatmodjo began his banking career during the 1990s crisis, when he was a consultant to the state bank restructuring agency tasked with fixing Indonesia’s broken financial system.

He suggests that finally the controlling owners’ interests are more aligned with those of minority shareholders.

“Prior to 1998, people owned banks because they wanted to get access to funding,” says Wirjoatmodjo. “After 2000, they own a bank because they want to have their share price acceleration increase because of bank performance.” 

Gift this article