USD 11B in Loans to Palm Oil Industry: ESG Issues May Create Indirect Risks for Bank Investors


December 11, 2018

Since the palm oil sector is capital intensive and needs long-term financing, palm oil companies depend on bank loans. By investing in banks that provide loans to the palm oil industry, investors may indirectly face deforestation-related risks. These risks are magnified when a bank’s exposure to palm oil companies with sustainability risks is relatively high and its equity position is relatively weak. Loans to a selection of 105 companies involved in the entire palm oil supply chain were analysed. The top 10 banks financing the palm oil sector were identified. The banks’ relative exposure to the palm oil sector and the risks involved were then analysed by looking to their policies and their specific loan portfolios. Finally, the main investors of the top 10 banks are listed.

Download the PDF here: USD 11 Billion Loans to Palm Oil Industry- ESG Issues May Create Indirect Risks for Bank Investors

Key Findings

  • Banks have USD 11.4 billion in outstanding loans to the palm oil sector. Southeast Asian (Indonesia, Malaysia, Singapore) banks are leading the list of palm oil sector financiers, providing 66 percent of the outstanding loans. East Asian (Japan, China, and Taiwan) and European banks follow, with 13 and 12 percent respectively. Banks hold virtually no bonds, which are controlled by institutional and private investors.
  • The ten largest loan issuers provide USD 7.5 billion, or 66 percent, of financing to the palm oil sector. Bank Mandiri (Indonesia), Oversea-Chinese Banking Corporation (OCBC) (Singapore) and Bank Negara Indonesia broke the one billion US dollar barrier in currently outstanding loans to the palm oil sector. All three of the banks have weak sustainability policies.
  • The banks with the highest relative exposure to the palm oil sector are Indonesia EximBank (5 percent of net loans), Bank Mandiri (3 percent) and Bank Negara Indonesia (3 percent). For these banks, palm oil loans represent 21 percent, 13 percent and 15 percent of equity. None of these banks include environmental standards for their clients. As a result, their borrowers are not required to have a NDPE policy in place to receive a loan, increasing risk for their investors.
  • Palm oil clients of the top 10 banks include companies with sustainability risks. Among the largest borrowers is CBI Group (Indonesia), with its subsidiary Sawit Sumbermas Sarana (SSMS) receiving most of the group’s loans. SSMS is excluded from the NDPE market and continues to deforest. Another borrower identified is Rajawali Group (owner of Eagle High Plantations). During the months of October and September of 2018, approximately 1,500 ha of peat were burned on one of its concessions. Tunas Baru Lampung (TBLA), also among the borrowers, has cleared almost 7,000 ha of peatland and forest across its concessions since 2014 and recently it was found to clear peat in South Sumatra.
  • Investors in banks could face indirect palm oil-related risk. The banks’ loan portfolios could be exposed to palm oil companies and their ESG risks. These risks relate to NDPE/market access, stranded assets and legal risks. The risks may result in a palm oil company not serving its debt anymore, reducing the value of the loan. Such a scenario would force a bank to write down a part of the loan, negatively affecting the equity value of the bank and finally its share price.
  • Case study: 79 percent of Bank Negara Indonesia (BNI) outstanding palm oil loans could pose a sustainability risk. This represents 2.6 percent of the bank’s total net loans. With equity to net loans ratio (EQL) at 22 percent, 12 percent of the bank’s equity is at risk.

Palm Oil Sector Relies on Banks for Its Financing

The palm oil sector is capital intensive and often requires upfront financing. Growers need funds to develop land and plant palm oil trees. This process takes three to five years to start bearing fruit and production peaks at seven or more years. Palm oil processing companies need capital to build or acquire mills and refineries. Against this backdrop, most palm oil companies need to borrow funds and rely on banks for their financing.

This report analyses the bank financing of the palm oil sector by looking at loans provided to a selection of 105 companies involved in the palm oil supply chain. Chain Reaction Research (CRR) selected the companies from a broader selection of “forest-risk” companies provided by Forests & Finance. All companies involved in palm oil were included. The figures in this study refer to bank loans provided from January 2010 to July 2018 (the period analysed in this report) and have yet to mature. The objective of this report is to provide an insight in the financing of the palm oil sector and focus on the top 10 banks now financing the industry at the moment.

Banks provided USD 34 billion in loans to the palm oil sector; USD 11 billion is currently outstanding

CRR found that banks provided USD 33.8 billion in loans to the palm oil refineries, traders and plantations during the analysed period. From those loans, USD 11.4 billion is currently not matured, referred to in the report as loans currently outstanding. Figure 1 below gives an overview of the yearly changes in the total amount of loans provided per year, as well as the breakdown of the loans currently outstanding per year of issuance.

Figure 1: Loans provided to the palm oil sector, Jan 2010 to Jul 2018

Sources: Forests & Finance, Chain Reaction Research

Southeast Asian banks lead palm oil sector financiers

Indonesian, Malaysian and Singaporean banks provided 33, 21 and 12 percent respectively of the total palm oil loans (Figure 2). Altogether, Southeast Asian banks provided 66 percent of the loans currently outstanding, totalling USD 7.6 billion.

Figure 2: Palm oil loans outstanding per region

Sources: Forests & Finance, Chain Reaction Research
*East Asia: Japan, China, Taiwan, South Korea

East Asian and European banks follow, with Japanese and Chinese institutions together providing the biggest chunk of the loans coming from East Asia. United Kingdom and the Netherlands lead the financiers from Europe. North American banks and banks from Oceania make up 4 and 2 percent respectively of the financing in the palm oil sector. Figure 3 below shows the top 5 banks from East Asia and Europe financing the palm oil sector. Banks from Southeast Asia, which provided the majority of the loans, are discussed in the section below.

Figure 3: Top 5 banks from East Asia and top 5 banks from Europe with outstanding loans to the palm oil sector


Sources: Forests & Finance, Chain Reaction Research

10 banks provide USD 7.5 billion of financing to the palm oil sector

Of the USD 11.4 billion currently outstanding, 66 percent was provided by 10 banks. Figure 4 below shows the top 10 banks with outstanding loans to the palm oil sector.

Figure 4: Top 10 banks with outstanding loans to the palm oil sector

Bank Country Loans to palm oil sector
(USD mln)
% palm oil loans to net loans* % equity to net loans
(EQL)*
% palm oil loans to equity*
Bank Mandiri Indonesia

1,510

3%

23%

13%

Oversea-Chinese Banking Corporation Singapore

1,042

1%

16%

4%

Bank Negara Indonesia Indonesia

1,031

3%

22%

15%

Bank Rakyat Indonesia Indonesia

838

2%

22%

7%

Maybank Malaysia 772 1% 15% 4%
RHB Banking Malaysia 710

2%

14%

13%

CIMB Group Malaysia

517

1%

15%

4%

HSBC United Kingdom

398

0.04%

19%

0.2%

Mizuho Financial Japan

329

0.05%

11%

0.4%

Indonesia Eximbank Indonesia

326

5%

26%

21%

Total top-10 banks 7,471

Average top-10 banks

2%

18%

8%

*ratios where calculated with the most recent available quarter figures
Sources: Forests & Finance, Chain Reaction Research, Thomson Reuters Eikon

Bank Mandiri (Indonesia), Oversea-Chinese Banking Corporation (OCBC) (Singapore) and Bank Negara Indonesia broke the one-billion USD Dollar barrier in currently outstanding loans to the palm oil sector.

As presented from Figure 4, the percentage of palm oil loans to the net loans of the top-10 banks is on average 2 percent. Indonesia EximBank, Bank Mandiri and Bank Negara Indonesia have the highest relative exposure to the palm oil sector, respectively 5, 3 and 3 percent. Indonesia EximBank is 100 percent fully owned by the Government of Indonesia, and therefore no institutional shareholders are involved. Looking at the ratio of equity to net loans (EQL) we see that for both Bank Mandiri and Bank Negara Indonesia it is relatively high, 23 and 22 percent respectively. A more specific case study is conducted at the last subsection of this report about Bank Negara Indonesia.

Indonesia EximBank, Bank Mandiri and Bank Negara Indonesia all have weak sustainability policies. Indonesia Eximbank scores zero points on the Forests and Finance matrix, Bank Mandiri two points and Bank Negara Indonesia four. Mizuho Financial has 17 points and HSBC is the only bank performing above the middle, scoring 30 out of 50 points (Figure 5). The two banks scoring high have very low exposure to palm oil loans, for both below 0.1 percent to their net loans.

Figure 5: Policies of top 10 palm oil banks

Bank Policy score (max=50)
Bank Mandiri

2

Oversea-Chinese Banking Corporation

9

Bank Negara Indonesia

4

Bank Rakyat Indonesia

2

Maybank

0

RHB Banking

0

CIMB Group

0

HSBC

30

Mizuho Financial

17

Indonesia Eximbank

0

Source: Forests & Finance, Profundo

More specifically, these three banks score zero points regarding the environmental standards they require from their clients in order to provide financial services, meaning that a borrower is not required to have a “No Deforestation, No Peat, No Exploitation” (NDPE) policy in place to be granted a loan. Such absence of environmental standards for a bank’s clients might render investing in the bank risky.

Top 10 banks’ main palm oil borrowers

Figure 6: Companies with palm oil loans outstanding provided by the top 10 banks as of 2010

Group Amount (USD mln)
Perkebunan Nusantara Group 1,663
Albukhary Group 932
Citra Borneo Indah Group (CBI Group) 589
Johor Group 583
Triputra Group 410
Genting Group 380
Sime Darby 369
Sampoerna Group 358
Sungai Budi Group 343
Rajawali Group 291
Wilmar Group 257
Carson Cumberbatch Group 229
Austindo Group 168
Jardine Matheson 166
Sinar Mas Group 146

Gozco Group

144

Provident Agro Group

111

Sources: Forests & Finance, Chain Reaction Research

Investing in a bank with high exposure to the palm oil sector and with a low policy score means there is no screening method in place and thus it is more likely that this bank is providing loans to palm oil companies carrying sustainability related risks. In order to determine the risk investors of each bank might face, it is important not to look only at the exposure each bank has to the palm oil sector and the bank’s policy score but also the breakdown of the palm oil companies each bank is providing loans to.

Figure 6 above shows the companies to which the top 10 banks currently have palm oil outstanding loans (above USD 10 million), while the figure on the side shows a summary of the total amount of the loans outstanding the top-10 banks have together in each palm oil group (above USD 100 million). A more detailed figure can be found in the Appendix of this report, Figure 11. Differences may arise in terms of sustainability related risks in each bank’s palm oil loan portfolio.

Most of the loans went to the Perkebunan Nusantara and Albukhary Groups for the amount of USD 1.7 and USD 0.9 billion respectively. Perkebunan Nusantara, a state-owned Indonesian palm oil grower and processer, has an agreement with Unilever to accelerate sustainable palm oil production in Indonesia. Bank Mandiri provided 62 percent of Perkebunan Nusantara’s palm oil loans.

Albukhary Group, a Malaysian conglomerate, is active in the palm oil sector mainly through its subsidiary Tradewinds Plantation. Tradewinds Plantation is managing 132,940 hectares and owns 11 mills. In a company assessment from SPOTT, the company scored low, reaching only about 10 percent in terms of sustainability transparency. Most of Albukhary Group’s palm oil loans came from RHB Banking and Maybank, 43 and 40 percent respectively of the Group’s total palm oil loans.

CBI Group (Indonesia) and Johor Group (Malaysia) follow with approximately USD 0.6 billion in palm oil loans outstanding for each. The main subsidiary of CBI Group attracting palm oil loans is the Indonesian Sawit Sumbermas Sarana (SSMS). CRR analysis, using satellite images, shows deforestation and peatland clearance by SSMS. SSMS still continues to clear forest, and it has been excluded from the NDPE market. Outstanding loans to SSMS were provided by Bank Mandiri (USD 179 million) and Bank Negara Indonesia (USD 162 million).

Johor Group, a palm oil grower managing 76,391 hectares of land in Indonesia and Malaysia for palm oil use and the owner of five mills, is an RSPO member since 2009, with 79 percent of its managing land and all its mills currently certified. The majority of loans provided to Johor Group are from RHB Banking and CIMB Group.

Institutional shareholders of the banks may face indirect risk

Figure 7 below and the summary figure on the side show the institutional shareholders in the top-10 banks with outstanding loans to the palm oil sector. Together these financial institutions hold shares in the top-10 palm oil banks of USD 91 billion in terms of value, at the most recent available date. A more detailed figure can be found in the Appendix of this report in Figure 12.

Figure 7: Top 20 institutional shareholders of the top-10 palm oil banks at most recent available filing date

Shareholder Country Value of shares held
(USD mln)
Permodalan Nasional Berhad Malaysia 15,734
BlackRock United States 14,550
Ping An Insurance Group China 10,980
Employees Provident Fund Malaysia 7,384
Vanguard United States 6,605
Khazanah Nasional Malaysia 4,708
Sumitomo Mitsui Trust Japan 4,416
Standard Life Aberdeen United Kingdom 3,480
State Street United States 3,222
Legal & General United Kingdom 2,974
Schroders United Kingdom 2,510
KWAP Retirement Fund Malaysia 2,256
Prudential (UK) United Kingdom 2,136
Lee Foundation Singapore 1,777
Capital Group United States 1,516
Norwegian Government Pension Fund – Global Norway 1,508
JPMorgan Chase United States 1,418
UBS Switzerland 1,361
Dimensional Fund Advisors United States 1,249
California Public Employees’ Retirement System United States 1,224
Total 91,010

Sources: Thomson Reuters Eikon, Chain Reaction Research

A shareholder of a bank providing loans to the palm oil sector could face indirect sustainability risks. The bank’s loan portfolio might be exposed to palm oil companies which face sustainability-related risks. These risks relate to NDPE and market access, and stranded assets as well as legal risks. As a consequence of these sustainability risks, a palm oil company may not be able to serve its debt anymore, leading to a reduction in the loan’s value. Subsequently, the bank would have to write down the loan. Such a scenario would negatively affect the equity value of the bank and finally the share price. Such an example is analysed in a case study at the last subsection of this report looking at Bank Negara Indonesia and its main institutional investors: Prudential UK, Vanguard and BlackRock.

The domino effect: Banks holding shares in other banks

The top 10 banks financing the palm oil sector hold shares in each other. When banks have similar loan portfolios and cross-hold shares, risk increases. Looking at Figure 6, many banks provide loans to the same palm oil companies, resulting in similar exposures. Taking into account Figure 8 and the fact that these banks hold shares in each other, a domino effect could occur from both direct and indirect risks.

OCBC owns shares in multiple banks (see Figure 8). OCBC holds 1.33 percent in Maybank, 1.73 percent in CIMB Group and below 0.1 percent in HSBC, RHB Banking, Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia. In a scenario that both Maybank and OCBC both provide loans to a palm oil company subjected to sustainability related risks, OCBC would face direct risk as a financier and additional indirect risk due to the shares OCBC holds to Maybank.

From the top 10 banks with loans to palm oil industry, CIMB Group has the most shares held by the other nine banks. Altogether, the other nine banks hold 1.82 percent of CIMB Group. A more detailed figure including all the banks holding shares in each other can be found in the Appendix of this report.

Figure 8: Top-10 palm oil banks holding shares in each other at most recent available filing date

Bank % shares outstanding Value of shares held (USD mln)
CIMB Group

1.82

308

Maybank

1.56

446

RHB Banking

0.77

42

HSBC

0.17

282

Bank Mandiri

0.12

27

Bank Rakyat Indonesia

0.09

24

Mizuho Financial

0.08

36

Oversea-Chinese Banking Corporation

0.06

21

Bank Negara Indonesia

0.05

5

Total

1,191

Sources: Thomson Reuters Eikon, Chain Reaction Research

Case study: Bank Negara Indonesia (BNI) – Exposed to palm oil chain

Bank Negara Indonesia has approximately USD 1 billion outstanding in loans that were issued during the analysed period of this study. This corresponds to 3 percent of the bank’s net loans and 15 percent of its equity (see Figure 4 earlier in the report). Figure 9 below shows the portfolio of BNI’s outstanding palm oil loans per borrower.

Figure 9: Outstanding palm oil loans of Bank Negara Indonesia

Group Borrower Amount
(USD mln)
Citra Borneo Indah Group
(CBI Group)
Sawit Sumbermas Sarana

162

Sawit Multi Utama

68

Tanjung Sawit Abadi

58

Kalimantan Sawit Abadi

39

Rajawali Group BW Plantation (Eagle High Plantation)

145

Perkebunan Nusantara Group PTPN VII

119

PTPN VIII

3

Sampoerna Group Selatanjaya Permai

50

Lanang Agro Bersatu

38

Sawit Selatan

28

Gozco Group Suryabumi Agrolanggeng

55

Golden Blossom Sumatra

47

Sinar Mas Group Sinar Mas Agro Resources

100

Barito Pacific Group Grand Utama Mandiri

62

Tintin Boyok Sawit Makmur

15

Barito Pacific

1

Sungai Budi Group Bumi Perkasa Gemilang

37

JOM Prawarsa Indonesia Persada Alam Hijau

5

Total

1,031

Sources: Forests & Finance, Chain Reaction Research

The recipients of these loans include a number of companies with known sustainability risks:

  • Citra Borneo Indah (CBI) Group owns the PT Sawit Mandiri Lestari plantation via its subsidiary Sawit Sumbermas Sarana (SSMS). However, it sold the plantation to a related entity while subject to a Roundtable on Sustainable Palm Oil (RSPO) complaint. Approximately 1,000 ha of forest has been cleared at this plantation in 2018. Between 2016 and 2018, deforestation was also seen on SSMS’s PT Kalimantan Sawit Abadi, PT Mitra Mendawai Sejati, PT Sawit Multi Utama and PT Tanjung Sawit Abadi, all of which are located in Central Kalimantan. SSMS have also cleared around 750 ha of peat on PT Borneo Sawit Gemerlang in Central Kalimantan in 2018.
  • The Rajawali Group owns Eagle High Plantations (formerly BW Plantation). The Group operates the Arrtu Energy Resources concession in West Kalimantan. During the dry season in September and October 2018, approximately 1,500 ha of peat burned on its concession, land that was possibly set aside as a conservation area. The area is also Bornean orangutan habitat. 
  • Perkebunan Nusantara (PT PN) has among the highest number of palm oil mills of any developer in Indonesia. It mostly sources from its own plantations and associated smallholders. However, on 15 June 2017, PT PN 13 had announced plans on its website (link now dead) to start sourcing fresh fruit bunches from the Bewani Oil Palm Plantation (BOPPL) in Papua New Guinea. The BOPPL has caused large scale deforestation. The article implies PT PN may have external supply of palm oil that could be linked to deforestation.
  • Between 2016 and 2018, Sampoerna Group deforested on the following plantations: PT Lanang Agro Bersatu in West Kalimantan (380 ha), PT Sampoerna Agro in South Sumatra (220 ha of peat), PT Sawit Selatan in South Sumatra (150 ha), PT Sungai Rangit in West Kalimantan (130 ha of peat) and PT Usaha Agro Indonesia (230 ha of peat).
  • Sungai Budi Group, the parent company of Tunas Baru Lampung (TBLA), was covered in an April 2018 Chain Reaction Research report detailing forest and peat clearance on PT Samora Usaha Jaya in South Sumatra, PT Solusi Jaya Perkasa in West Kalimantan and PT Bumi Perkasa Gemilang in West Kalimantan. As recently as November 2018, peat was cleared by TBLA on their PT Dinamika Graha Sarana in South Sumatra. Monitoring by CRR partner Aidenvironment has also detected peat clearance on PT Samora Usaha Jaya concessions in South Sumatra in November 2018.

An estimated 79 percent of BNI’s outstanding palm oil loans could impose a sustainability risk. This totals 2.6 percent of the bank’s net loans. Although the bank has a small cushion available to absorb loan losses as equity to net loans ratio (EQL) is 22 percent, 12 percent of the bank’s equity is at risk.

Due to BNI’s exposure to risky loans and the low policy score of the bank, 4 out of 50, the bank’s shareholders could face indirect risk. The government of Indonesia holds 60.6 percent of BNI. Institutional investors Prudential UK and US-based Vanguard and BlackRock hold above 1 percent of BNI’s shares.

Figure 10: Main shareholders of Bank Negara Indonesia at most recent available filing date

Main shareholders Country %
Government of Indonesia Indonesia

60.6

Prudential (UK) United Kingdome

2.1

Vanguard United States

1.4

BlackRock United States

1.3

Source: Thomson Reuters Eikon

Figure 11: Companies with palm oil loans outstanding provided by the top 10 banks as from 2010

Bank Company Amount
(USD mln)
Bank Mandiri Perkebunan Nusantara Group 1,038
Citra Borneo Indah Group (CBI Group) 179
Sampoerna Group 73
Provident Agro Group 57
Harita Group 51
Gozco Group 42
Carson Cumberbatch Group 34
Sungai Budi Group 26
Jardine Matheson 10
Total Bank Mandiri 1,510
Oversea-Chinese Banking Corporation Genting Group 228
Triputra Group 182
Austindo Group 146
Sime Darby 123
Jardine Matheson 99
Wilmar Group 99
Albukhary Group 62
Sampoerna Group 41
Johor Group 37
Sungai Budi Group 24
Cargill 2
COFCO 1
Total Oversea-Chinese Banking Corporation 1,042
Bank Negara Indonesia Citra Borneo Indah Group (CBI Group) 326
Rajawali Group 145
Perkebunan Nusantara Group 121
Sampoerna Group 116
Gozco Group 102
Sinar Mas Group 100
Barito Pacific Group 78
Sungai Budi Group 37
JOM Prawarsa Indonesia 5
Perkebunan Nusantara Group 288
Sungai Budi Group 198
Rajawali Group 146
Sampoerna Group 85
Provident Agro Group 54
Albukhary Group 45
Johor Group 13
Wilmar Group 9
Tiga Pilar Sejahtera Group 0.2
Toba Bara Sejahtra Group 0.2
Total Bank Negara Indonesia 1,869
Maybank Albukhary Group 370
Triputra Group 176
Genting Group 78
Perkebunan Nusantara Group 72
Sungai Budi Group 58
Wilmar Group 9
Charoen Pokphand Group 8
Total Maybank 772
RHB Banking Albukhary Group 403
Johor Group 267
JOM Prawarsa Indonesia 31
Wilmar Group 9
Total RHB Banking 710
CIMB Group Johor Group 267
Genting Group 73
Sinar Mas Group 46
Harita Group 39
Carson Cumberbatch Group 34
Triputra Group 25
Austindo Group 22
Charoen Pokphand Group 10
Total CIMB Group 517
HSBC Carson Cumberbatch Group 160
Sime Darby 123
Albukhary Group 52
Wilmar Group 34
Cargill 9
Jardine Matheson 9
Olam International 6
Triputra Group 3
Bolloré 1
COFCO 0.2
Itochu 0.1
Total HSBC 398
Mizuho Financial Sime Darby 123
Wilmar Group 99
Jardine Matheson 49
Itochu 30
Charoen Pokphand Group 12
Olam International 10
Cargill 7
Total Mizuho Financial 329
Indonesia Eximbank Perkebunan Nusantara Group 144
Citra Borneo Indah Group (CBI Group) 84
Sampoerna Group 44
JOM Prawarsa Indonesia 31
Triputra Group 23
Total Indonesia Eximbank 326
Total top-10 banks 7,471

Sources: Forests & Finance, Chain Reaction Research

Figure 12: Top 20 institutional shareholders of the top 10 banks with outstanding loans to the palm oil sector — values at the most recent available date

Shareholder Bank Amount (USD mln)
Permodalan Nasional Berhad Maybank 13,652
CIMB Group 1,555
RHB Banking 527
Total Permodalan Nasional Berhad 15,734
BlackRock HSBC 11,363
Mizuho Financial 951
Oversea-Chinese Banking Corporation 706
Bank Mandiri 462
Bank Rakyat Indonesia 380
Maybank 336
CIMB Group 198
Bank Negara Indonesia 120
RHB Banking 34
Total Blackrock 14,550
Ping An Insurance Group HSBC 10,980
Total Ping An Insurance Group 10,980
Employees Provident Fund Maybank 3,221
RHB Banking 2,126
CIMB Group 1,745
HSBC 292
Total Employees Provident Fund 7,384
Vanguard HSBC 3,035
Mizuho Financial 1,148
Oversea-Chinese Banking Corporation 733
Maybank 480
Bank Rakyat Indonesia 386
CIMB Group 361
Bank Mandiri 288
Bank Negara Indonesia 128
RHB Banking 46
Total Vanguard 6,605
Khazanah Nasional CIMB Group 4,708
Total Khazanah Nasional 4,708
Sumitomo Mitsui Trust Mizuho Financial 4,283
HSBC 112
Oversea-Chinese Banking Corporation 17
Bank Mandiri 2
Bank Rakyat Indonesia 1
Bank Negara Indonesia 1
Maybank 0.4
CIMB Group 0.4
RHB Banking 0.03
Total Sumitomo Mitsui Trust 4,417
Standard Life Aberdeen HSBC 3,032
Oversea-Chinese Banking Corporation 374
Bank Mandiri 42
Mizuho Financial 10
Bank Rakyat Indonesia 10
Bank Negara Indonesia 8
CIMB Group 4
Maybank 0.3
RHB Banking 0.005
Total Standard Life Aberdeen 3,480
State Street HSBC 2,871
Oversea-Chinese Banking Corporation 135
Mizuho Financial 79
Bank Rakyat Indonesia 50
Maybank 38
Bank Mandiri 20
Bank Negara Indonesia 14
CIMB Group 11
RHB Banking 4
Total State Street 3,222
Legal & General HSBC 2,913
Mizuho Financial 22
Oversea-Chinese Banking Corporation 11
Maybank 8
Bank Rakyat Indonesia 8
CIMB Group 7
Bank Mandiri 3
Bank Negara Indonesia 1
RHB Banking 1
Total Legal & General 2,974
Schroders HSBC 1,790
Oversea-Chinese Banking Corporation 602
Bank Mandiri 84
Bank Negara Indonesia 17
Bank Rakyat Indonesia 9
Mizuho Financial 4
Maybank 4
CIMB Group 1
Total Schroders 2,511
KWAP Retirement Fund Maybank 1,087
CIMB Group 929
RHB Banking 211
HSBC 29
KWAP Retirement Fund 2,256
Prudential (UK) HSBC 1,082
CIMB Group 359
Maybank 225
Bank Negara Indonesia 208
Oversea-Chinese Banking Corporation 130
Mizuho Financial 50
Bank Mandiri 38
RHB Banking 25
Bank Rakyat Indonesia 19
Total Prudential (UK) 2,136
Lee Foundation Oversea-Chinese Banking Corporation 1,777
Total Lee Foundation 1,777
Capital Group HSBC 1,245
Oversea-Chinese Banking Corporation 228
Bank Rakyat Indonesia 19
Bank Mandiri 13
Mizuho Financial 11
Total Capital Group 1,516
Norwegian Government Pension Fund Mizuho Financial 513
Oversea-Chinese Banking Corporation 316
Bank Mandiri 304
Bank Rakyat Indonesia 137
CIMB Group 106
Maybank 92
Bank Negara Indonesia 24
RHB Banking 16
Total Norwegian Government Pension Fund 1,508
JPMorgan Chase HSBC 812
Oversea-Chinese Banking Corporation 205
Bank Rakyat Indonesia 188
CIMB Group 68
Bank Mandiri 64
Maybank 63
Mizuho Financial 11
Bank Negara Indonesia 7
RHB Banking 0.3
Total JPMorgan Chase 1,418
UBS HSBC 1,049
Bank Mandiri 134
Mizuho Financial 60
Oversea-Chinese Banking Corporation 40
Maybank 21
CIMB Group 20
Bank Negara Indonesia 19
Bank Rakyat Indonesia 17
RHB Banking 1
Total UBS 1,361
Dimensional Fund Advisors HSBC 667
Bank Mandiri 100
Mizuho Financial 99
Bank Rakyat Indonesia 87
Bank Negara Indonesia 84
Maybank 78
CIMB Group 68
Oversea-Chinese Banking Corporation 51
RHB Banking 15
Total Dimensional Fund Advisors 1,249
California Public Employees’ Retirement System Bank Mandiri 564
HSBC 401
Mizuho Financial 110
Oversea-Chinese Banking Corporation 61
Bank Rakyat Indonesia 28
Maybank 25
CIMB Group 20
Bank Negara Indonesia 13
RHB Banking 3
Total California Public Employees’ Retirement System 1,225
Total top-20 shareholders 91,011

Sources: Chain Reaction Research, Thompson Reuters Eikon

Figure 13: Top 10 banks with outstanding loans to the palm oil sector, crossholding shares, most recent available date

Bank Shareholder Amount
(USD mln)
% shares outstanding
Maybank Oversea-Chinese Banking Corporation 389 1.33
CIMB Group 39 0.16
HSBC 10 0.04
RHB Banking 7 0.03
Mizuho Financial 1 0.003
Total Maybank 446 1.56
CIMB Group Oversea-Chinese Banking Corporation 297 1.73
RHB Banking 6 0.05
HSBC 5 0.04
Maybank 0.3 0.003
Mizuho Financial 0.3 0.003
Total CIMB Group 308 1.82
HSBC Mizuho Financial 237 0.15
Oversea-Chinese Banking Corporation 45 0.02
CIMB Group 0.2 0.0001
Total HSBC 282 0.17
RHB Banking Oversea-Chinese Banking Corporation 37 0.68
CIMB Group 4 0.07
HSBC 1 0.01
Mizuho Financial 0.2 0.003
Maybank 0.1 0.003
Total RHB Banking 42 0.77
Mizuho Financial HSBC 36 0.08
Total Mizuho Financial 36 0.08
Bank Mandiri HSBC 18 0.09
Oversea-Chinese Banking Corporation 4 0.02
Mizuho Financial 3 0.01
CIMB Group 2 0.01
RHB Banking 0.2 0.001
Total Bank Mandiri 27 0.12
Bank Rakyat Indonesia HSBC 15 0.06
Oversea-Chinese Banking Corporation 4 0.02
Mizuho Financial 3 0.01
CIMB Group 1 0.01
RHB Banking 0.2 0.001
Total Bank Rakyat Indonesia 24 0.09
Oversea-Chinese Banking Corporation HSBC 18 0.05
CIMB Group 2 0.01
Mizuho Financial 0.3 0.001
RHB Banking 0.1 0.0003
Total Oversea-Chinese Banking Corporation 21 0.06
Bank Negara Indonesia HSBC 4 0.04
Oversea-Chinese Banking Corporation 1 0.01
Mizuho Financial 0.3 0.003
CIMB Group 0.2 0.002
RHB Banking 0.1 0.001
Total Bank Negara Indonesia 5 0.05
Total top-10 banks 1,191

Sources: Chain Reaction Research, Thomson Reuters Eikon

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