Bank of America – Merrill Lynch Acquisition During Global Financial Crisis

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Part I: Case Summary

“On September 15, 2008, Merrill Lynch & Co., Inc. and Bank of America Corporation announced a strategic business combination in which a subsidiary of Bank of America will merge with and into Merrill Lynch. If the merger is completed, holders of Merrill Lynch common stock will have a right to receive 0.8595 of a share of Bank of America common stock for each share of Merrill Lynch common stock held immediately prior to the merger. In connection with the merger, Bank of America expects to issue approximately 1.710 billion shares of common stock and 359,100 shares of preferred stock” –Bank of America Letter to Shareholder


The 2008 Global Financial Crisis has taken many casualties in the financial market worldwide, including the failure of Global Systemically Important Banks (G-SIBs). The first financial institution to collapse at the crisis was Countrywide Financial Corp., American largest mortgage lender that later acquired by Bank of America in January 2008. Two months later, Bear Stearns, which also has a great amount of Mortgage Backed Securities (MBS), was rescued from bankruptcy by JP Morgan Chase for a price of $10/share. Seven days before, its share was still trading at $65/share. On September 7th, two Government Sponsored Entities (GSE), FNMA and FHLMC were privatized by the US Department of Treasury due to the severe loss that would lead to bankruptcy and shook the financial market to a more catastrophic situation (Havemann, 2009).

There was fear in the market and financial institutions with large exposure to Asset Backed Securities are very fragile. After series of acquisition made in the financial system in the first semester of 2008, the market then shorted Lehman Brothers and Merrill Lynch, which both have great MBS exposure. On September 14th, Bank of America agreed to acquire Merrill Lynch for $ 50 billion while Lehman Brothers declared bankruptcy the next day. The crisis worsens for the next few months, leading to the failure of other GSIBs such as American International Group (AIG), Washington Mutual, and Wachovia Corp (Havemann, 20009).

In this case study, we are going to highlight the valuation and acquisition process of Merrill Lynch by Bank of America in the midst of 2008 Global Financial Crisis. This case study is not intended to determine whether the action taken was right or wrong, but rather intended to highlight alternative options using data available at the time.


Bank of America

Bank of America is the world’s largest bank based in Delaware and operating under U.S. federal law. It is headquartered in Charlotte, North Carolina. It serves individual customers, small and middle enterprises, and large corporations in 175 countries. Bank of America business lines includes banking, investing, asset management, and risk management products and services. In United States alone, BOA had 59 million customers served through 6000 retail banking offices, 18000 ATMs, and online banking. As of June 30, 2008 it had total consolidated assets of $ 1.7 trillion, deposits of $ 785 million, and stockholders’ equity of $ 163 billion (Bank of America, 2008).

Bank of America business and financial performance had been great from 2003 up to 2006, interest income grew at 19% CAGR, non-interest income grew at 27.6% CAGR, and net income doubled during the period. During the same period loans and leases distributed grew at 22.3% CAGR, while deposits grew at 18.3%. The good business performance was supported by the low interest rate policy of Federal Reserve between 2001-2004, where the interest rate was cut from 6% to the low of 0.75% in December 2002 (figure 1.1). Federal Reserve was determined to stimulate growth of the economy post Internet bubble period, in turn encouraging Americans to lend more. There was a long period where interest rate stays, until it was increased gradually in June 2004 to June 2007 (Bank of America, 2004; 2005; 2006).

The increase in interest rate leads to increase in floating rate of mortgage as well; at the time many Americans are not in a good financial position to service their mortgage, especially the sub-prime segment and the Adjustable Rate Mortgages (ARMs). The lax lending standard employed previously results in high non-performing loan and default of home borrowers, decreasing the home price nationwide. The high non-performing loan and foreclosure of houses impacted all saving and loan, banks, and financial institution with exposure to mortgage, including investment bank that securitize the mortgages into MBS (Havemann, 2009).

Figure 1.1 United States Federal Funds Rate January 2000 to September 2008

Apart from the issues with housing and mortgage industry, in January 2008, Bank of America acquired Countrywide Financial for $ 2.5 billion (Bank of America, 2007), Countrywide was the largest mortgage lender in US. It has $ 408 billion mortgage originations in 2007 and servicing portfolio of $ 1.5 trillion with 9 million loans. BoA thinks that Countrywide acquisition would affirm their position as the nation’s premier lender to consumers. Due to the weakness in housing market and increasing trend of NPL, in 2007 Bank of America net income decrease 29% YoY due to the rise in provision combined with decrease in interest and non-interest income (Bank of America, 2008). In the first half of 2008, net income continue to worsen, decreasing 58% compared to the first half of 2007 due to the tripling provision for credit losses and decrease in non-interest income (figure 1.2). Meanwhile, non-performing assets quadrupled from 0.32% to 1.13% between first half of 2007 and 2008 (figure 1.3) (Bank of America, 2009).

The deterioration of Bank of America business was also reflected in the stock price traded in NYSE, after rising from $ 40/share to $ 55/share between January 2004 to late 2006, BoA stock price tumbled to its low of $ 18/share. It then fluctuated between $ 25-40/share in September 2008 (figure 1.4). Breakdown of Bank of America income statement and balance sheet are available on the appendix.

Figure 1.2 Bank of America Income Statement and Financial Ratio 2003 – mid 2008 (Bank of America, 2008)

Figure 1.3 Bank of America Balance Sheet and Assets Quality 2003 – mid 2008 (Bank of America, 2008)

Figure 1.4 Bank of America Stock Price January 2004 to September 2008


Merrill Lynch

Merrill Lynch was founded in 1914 and became listed on Jun 1971. It is one of the leading capital markets, advisory, and wealth management companies in the world. Merrill Lynch has branches across 40 countries and total client assets of $ 1.5 trillion at September 2008, it also has 45% voting interest and half of the economic interest of BlackRock, Inc., world’s largest publicly traded asset management with $1.3 trillion in assets under management at the time. Merrill Lynch products and services include advisory to corporations, governments, institutions and individuals worldwide, apart from its role as investment bank, global trader, and underwriter of securities and derivatives (Bank of America, 2008).

Merrill Lynch had been actively underwriting derivatives, including CDO, CDO squared, and CDO cube that during the course of financial crisis turned to be worth significantly less than the par value. Between 2006 and 2007, Merrill was the lead underwriter on 136 CDOs worth $93 billion, which it retained partly and lead to billions of dollar losses. For example, in the middle of 2008 Merrill Lynch sold a group of CDOs valued at $ 30.6 billion to Lone Star Funds for $ 1.7 billion in cash and $ 5.1 billion in loan (Keoun and Harper, 2008).

Merrill Lynch business and performance had been great from 2003 to 2006, revenue grew at 36.3% CAGR, while net income grew at 24.4% CAGR (figure2.1) (Merrill Lynch & Co., 2003; 2004; 2005; 2006). Securitization business had been growing at a very rapid pace and contributed significantly Merrill’s balance sheet, at least 13% of its assets at the end of 2006 (Appendix 2.2). In 2007 Merrill Lynch incurred $ 8 billion loss in net income due to the significant increase in interest expense (provision for losses), although in the first half of the year it still recorded a profit of $ 4.17 billion. The condition deteriorated in the first half of 2008, when total revenues dropped 57% YoY. Stockholders’ equity, in turn, decrease 17.6% in the first half of 2008 compared to first half of 2007 (Bank of America, 2008). Considering Merrill Lynch exposure to MBS and other derivatives, significant decline in their value could easily wiped out Merrill’s equity (look at appendix 2.2 for details). Breakdown of Merrill Lynch income statement and balance sheet are available on the appendix.

Figure 2.1 Merrill Lynch Income Statement and Balance Sheet 2003 – mid 2008 (Bank of America, 2008)

Deterioration of Merrill Lynch business performance and market’s fear of worsening crisis drove Merrill’s stock down from $ 50/share in January 2008 to $ 15-25/share in September 2008 (figure 2.2).

Figure 2.2 Merrill Lynch Stock Price January 2008 to September 2008


BoA-ML Acquisition

In September 2008 US stock market has been declining 37% from one year earlier, there were speculation on the impending collapse of financial institutions such as Lehman Brothers. Lehman Brothers announced $ 3.9 billion net loss for its third quarter of 2008 on September 10th, 2008. Merrill Lynch stock declined 36% in only one week. On Saturday the same week, John Thain, Chairman and CEO of Merrill Lynch, contacted Ken Lewis, Chairman and CEO of Bank of America. Mr. Thain proposed for Bank of America to acquire 9.9% equity stake in Merrill Lynch and to provide credit facility. However, Mr. Lewis said that he was not interested in acquiring minority stake in Merrill Lynch, but is interested in business combination with Merrill Lynch. He beliefs that the combination of both companies would complement each other business line, in retail brokerage and wealth management, also in investment banking and investment management (Bank of America, 2008).

In light of the imminent bankruptcy of Lehman Brothers and deterioration in financial market, Bank of America and Merrill Lynch began arranging meetings among management and advisors to discuss the pro and cons of such transactions and did a due diligence on the business, financial, operational, and legal aspect of the transaction. Representatives of Merrill Lynch also met with representatives from BoA to discuss the valuation and pricing shares of Merrill’s common stock, Merrill Lynch indicated that they were seeking a significant premium to the last Friday’s closing price of $ 17.05/share, also at the appropriate book value multiple. The discussion and negotiation over the weekend results in the transaction price of $ 29.00/share, equal to exchange ratio of 0.8595 BoA common stock and 70.1% premium to September 12th, 2008 closing price (Bank of America, 2008).

Merrill Lynch benefits from the merger through BoA business that complements Merrill Lynch global wealth management, markets, and investment banking businesses, and stronger capital, funding capabilities, and liquidity of BoA. More importantly, Merrill Lynch would avoid downgrade from rating agency that potentially leads to bankruptcy. Meanwhile BoA benefits from the customer bases, business products and skills of Merrill Lynch services to enhance the capabilities of its business line. The Acquisition was also expected to save $ 7 billion each year on a pre-tax basis due to overlapping business and infrastructure. The acquisition itself may cost up to $ 3 billion pre-tax (Bank of America, 2008).

Merrill Lynch, Pierce, Fenner & Smith Incorporated, Merrill Lynch financial advisor valued Merrill Lynch stock at range of $ 21.93 – $ 29.25, while FPK and J.C. Flowers, Bank of America financial advisor valued Merrill Lynch stock at range of $ 20.96 – $ 31.77 (figure 3.1). FPK and J.C. Flowers also valued Merrill’s potential synergy with BoA, leading to a higher valuation of $ 32.7 – $ 45.96 (Bank of America, 2008).

Figure 3.1 Merrill Lynch and Bank of America Valuation

Figure 3.2 Pro-Forma Combined Income Statement of ML and BoA (Bank of America, 2008)

Figure 3.3 Pro-Forma Combined Balance Sheet of ML and BoA (Bank of America, 2008)

To stabilize the financial market, on October 3rd, 2008, President George W. Bush signed Emergency Economic Stabilization Act of 2008 into law, including the authorization of Troubled Asset Relief Program (TARP), a $ 700 billion fund to buy toxic assets from financial institutions. US Treasury Department used the fund to inject $ 125 billion in capital through preferred shares and warrants to nine prominent financial institutions, including BoA and Merrill Lynch (Rhee, 2010). On November, Merrill Lynch submitted 10-Q for its third quarter, showing $ 8.25 billion pre-tax loss and difficulty in mitigating risk due to market illiquidity. By then, Federal Reserve had approved the acquisition under the Bank Holding Act, BoA and Merrill’s shareholder had also approved the deal, but the acquisition was still in pending. In early December Ken Lewis learned Merrill was expected to incur $ 12 billion losses from its exposure to MBS and related securities in the fourth quarter, $ 3 billion increase from the estimate just 6 days before. Ken Lewis did not inform shareholders of Merrill’s losses, but he then advised the board about it. Lewis was considering canceling the deal through the merger agreement’s Material Adverse Change (MAC) clause. The MAC would have allowed BoA to terminate the deal based on material change in events after the signing of the merger agreement but before closing the deal. Ken Lewis informed the Treasury Secretary and Federal Reserve Chairman, Henry Paulson and Ben Bernanke, that he was considering terminating the deal. Paulson and Bernanke advised Lewis against it, considering the adverse consequences should Merrill Lynch collapse that potentially add more systemic risk and uncertainty to the market (Rhee, 2010). They believed that Merrill could not survive independently and would collapse like Bear Stearns and Lehman Brothers.

Four days later Ken Lewis met Paulson again, to talk about exercising the MAC. Paulson responded by threatening to fire Bank of America’s board and management if the company terminate or renegotiate the acquisition. The next day, BoA board met to discuss the acquisition decision, whether it was still beneficial to BoA or not, Lewis also expressed that “the Treasury and Fed would remove board and management of the corporation” if they invoke the MAC clause. The government, however, gave verbal assurance of financial assistance through TARP and provides downside protection against asset value decline. The government also argues that there is weak legal base for BoA to exercise MAC, as stated below:

“Material Adverse Effect” shall not be deemed to include effects to the extent resulting from . . . changes in . . . general business, economic or market conditions, including changes generally in prevailing interest rates, currency exchange rates, credit markets and price levels or trading volumes in the United States or foreign securities markets, in each case generally affecting the industries in which such party or its Subsidiaries operate and including changes to any previously correctly applied asset marks resulting there from . . . except . . . to the extent that the effects of such change are disproportionately adverse to the financial condition, results of operations or business of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate . . . (Rhee, 2010).

At the time, Merrill Lynch deteriorating performance was caused by the general economic condition and it was not necessarily worse than its peers. Bank of America stock had declined from $ 24/share in September 2008 to $ 6.58 in December 2008 after announcing its acquisition of Merrill Lynch, as the market think Merrill would be a liability to BoA.


Part II: Analysis and Discussion

In this part, we display our own valuation using only income statement from 2004 to 2008, which we believe reflect the available information at December 2008 when Ken Lewis was making the decision whether to close the deal. We do valuation on Bank of America, Merrill Lynch, and the pro-forma post M&A projection of BoA-ML.


BOA valuation

Figure 4.1 Bank of America Condensed Income Statement Projection (without M&A)

We projected BoA net interest income to be declining in the next three years due to the low interest rate policy conducted by Federal Reserve combined with the reluctance of business and individuals to lend and increase consumption. Non-interest in come is expected to be stable somewhat due to the need for retail consumer conducting day-to-day business activities. The combination of declining interest income and stable non-interest income is expected to results in a decline of total revenue of 12% in 2009, 13% in 2010, and began to stable in 2011.

Provision for credit losses is expected to be high in 2009, as foreclosure remains high due to the rising trend of unemployment since 2007. The decline in house price nationally below mortgage value may also leave homeowners no choice but to default. The rest of homeowners are expected to face difficulty in servicing their debt, leading to higher non-performing loan as well.

Operational expense is expected to decline until the economic condition improves, the efficiency possible are layoff, selloff in assets, and streamlining the business in general. Assistance from the government through TARP and preferred stock are expected to incur significant cost to BoA common equity shareholders, leading to a marked decline in net income available to common shareholders. Preferred stock would then be terminated gradually as the company generates excess cash.

Figure 4.2 Bank of America Free Cash Flow to Equity Valuation Method

Using the assumption above, we derived the expected free cash flow to equity for the next three years and valued the company using FCFE method. It results in Bank of America fair value of $ 22.85/share, a significant premium to December 2008 share price of $ 6.58, but only half the share price trading one year before. It was common during crisis that shares are trading significantly below its fair value due to the fear of sustained worsening economic condition and potential bankruptcy. Our valuation was in line with BoA stock price before announcing Merrill’s acquisition. Nevertheless, we are confident in our valuation based on the financial ratio displayed in figure 4.3. We believe Bank of America has an adequate financial position due to business diversification and more manageable exposure to mortgage compared to investment bank that securitize the mortgage.

Figure 4.3 Bank of America Financial Ratio 2004 – 2011F


ML valuation

Figure 5.1 Merrill Lynch Condensed Income Statement Projection (without merger)

Unlike BoA, Merrill Lynch worst performance is expected to be in 2008 due to the loss of mark-to-market securities that it holds. Merrill’s business is expected to stabilize quickly in 2009 as investment-banking job tends to be short term in nature and have an increasing demand, especially during market turmoil. Breakdown of expected Merrill Lynch revenue is available at the appendix. Merrill Lynch is projected to also reduce the number of employee and streamline the business in an effort of cost reduction. Government assistance in the form of preferred stock would also be gradually paid as the company’s condition improves. At the time, Merrill’s main concern was to avoid bankruptcy at all cost.

 Figure 5.2 Merrill Lynch Free Cash Flow to Equity Valuation Method

Using the estimated projection above, we use FCFE method to value Merrill Lynch and derive equity fair value of $ 7.76/share, half of Merrill’s stock price trading at December 2008, and a 73% discount to the agreed acquisition price ($ 29/share). Merrill’s loss in 2008 alone nearly wipes its equity value, meaning that unless Merrill was acquired imminently, it would fail. Another signal of the potential failure of Merrill Lynch was showed by its Capital Adequacy Ratio (CAR) and Tier 1 Common Capital Ratio, which were below 8% and 4%, respectively, as mandated by Federal Reserve (figure 5.3).

Figure 5.3 Merrill Lynch Financial Ratio 2004 – 2011F


BOAML post-acquisition valuation

In this part, we did valuation on post-M&A of BoA and ML including the synergy that may be resulted. The underlying assumption of the projection is similar to those we use when evaluating Bank of America and Merrill Lynch independently. Acquisition of Merrill Lynch is expected to contribute significantly to BoA non-interest income, while the efficiency from overlapping infrastructure and employee is projected to reduce the operational expenses by 25% – 30% in 2009 compared to the previous year (figure 6.1).

Figure 6.1 BoA and ML Post Merger Income Statement Projection 2004 – 2011F

The number of shares outstanding has also counted the effect of dilution from Merrill’s common stock conversion to BoA common stock; previously in December 2008 there was 4.5 billion of BoA common stock outstanding, with 0.8595 conversion factor for ML’s stock, there is now 5.6 billion shares outstanding.

Figure 6.2 Synergy Potential of BoA – ML M&A (pre-tax)

We projected efficiency of 90% in the operational expense of BoA-ML, apart from the efficiency done by each company separately. The M&A is expected to save $ 5.4 billion in 2009 alone and a net present value of $ 58.5 billion pre-tax (figure 6.2).

Figure 6.3 BoA – ML Free Cash Flow to Equity Valuation Method

Using the projection above, we use FCFE to derive at the equity value of BoA after Merrill’s acquisition. Our valuation results in equity fair value of $ 22.87/share, it reflects 12.55x 2009F earnings and 9.46x 2010F earnings, historically BoA traded at 11-13x its current year earnings. Supplemental financial ratio of the projected incomes statement is displayed by figure 6.4.

Figure 6.4 BoA – ML Post Merger Financial Ratio 2004 – 2011F

The acquisition of Merrill Lynch by Bank of America, according to our valuation, is expected to create a market value of synergy of $ 14.7 billion. In December 2008, the market capitalization of both banks are at the low point of $ 46.5 billion combined, while our valuation of both banks result in fair market capitalization of $ 114.5 billion. After M&A, our valuation shows that the fair market capitalization is $ 129.2 billion, or a synergy value creation of $14.7 billion (figure 6.5).

Figure 6.5 Market Valuation of BoA – ML M&A Synergy


Part III: Conclusion and Recommendation

In this part we are going to summarize the event leading to the point Ken Lewis had to make a decision whether to close the deal for acquiring Merrill Lynch. Then we outline our recommendation as if we are on the side of BoA management.



In late December 2008, Bank of America CEO, Ken Lewis, was contemplating whether to close the deal for acquiring Merrill Lynch, a prominent investment bank that was suffering great loss from its exposure to Mortgage Backed Securities. He had learned earlier that Merrill Lynch was incurring large losses beyond what the September 2008 due diligence expect, meanwhile the stock price of Bank of America itself had been declining 73% since announcing Merrill’s acquisition in September. He was considering exercising the Material Adverse Change clause to cancel or renegotiate the deal, however, he was pushed by the Treasury Secretary and Federal Reserve to close the deal without renegotiating further, as it was expected to increase the systemic risk to financial market. The government even threatened to fire Bank of America board and management if they attempt to cancel or renegotiate the deal.

On the agreement in September, BoA agrees to acquire Merrill Lynch for $ 29/share with conversion ratio of 0.8595 to BoA common stock, a 70.1% premium at the time. At the time, BoA was trading between $ 30-35/share, while Merrill was trading between $ 15-25/share. On December 31, as the crisis worsen, BoA was trading at $ 6.58/share while ML was trading at $ 13.25/share. Lewis was thinking whether the acquisition might jeopardize the going concern of Bank of America and incur losses to BoA shareholders.



Our recommendation is for BoA to renegotiate the acquisition price with Merrill Lynch, decreasing the acquisition price to below $10/share. At such price, BoA has more room for error, in case Merrill’s asset turn to be worse than previously expected. As CEO of a public company, Ken Lewis has the fiduciary duty only to shareholders and should not be impaired by threat made by other parties, including government official. Even in he was fired due to the negotiation or cancelling the deal, he should be proud for doing his job well. Closing the deal at the time would mean overpaying for Merrill Lynch stock, a contrary of JPMorgan acquisition of Bear Stearns at a discount of 60% few months earlier. Renegotiating the deal would give BoA more leverage as the time passes, Merrill Lynch would be forced to take any deal it could because it knows that it could not survive independently, and filing for bankruptcy would leave shareholders with nothing.

By lowering the purchase price, BoA shareholders would be benefitted through lower dilution in ownership and higher synergy value created from efficiency of the firms at the expense of Merrill Lynch shareholders. Closing the deal could potentially brought BoA to a difficult condition, especially if MBS and other derivatives value continue its decline. In December 2008, BoA market capitalization ($ 30 billion) was only twice Merrill’s ($ 16 billion). In the acquisition, the liabilities of Merrill Lynch are transferred to BoA, therefore BoA wants to pay as little, but fair for the value of Merrill Lynch in general. The due diligence over the weekend done in September could not possibly be comprehensive for firm with the size and complexity of Merrill Lynch, therefore renegotiating the deal after a more in depth analysis makes sense.



Bank of America Corporation. (2008). Form 14(a) 2008. Retrieved from SEC EDGAR website

Bank of America Corporation. (2004). Form 10-K 2004. Retrieved from SEC EDGAR website

Bank of America Corporation. (2005). Form 10-K 2005. Retrieved from SEC EDGAR website

Bank of America Corporation. (2006). Form 10-K 2006. Retrieved from SEC EDGAR website

Bank of America Corporation. (2007). Form 10-K 2007. Retrieved from SEC EDGAR website

Bank of America. (2008). Bank America Receives Federal Reserve Approval of Countrywide Purchase. Retrieved from

Havemann, J. (2009). The Financial Crisis of 2008: Year in Review 2008. Retrieved from

Keoun, B., Harper, C. (2008). Merrill to Sell $8.5 billion of Stock, Unload CDOs. Bloomberg.

Merrill Lynch & Co. (2003). Form 10-K 2003. Retrieved from SEC EDGAR website

Merrill Lynch & Co. (2004). Form 10-K 2004. Retrieved from SEC EDGAR website

Merrill Lynch & Co. (2005). Form 10-K 2005. Retrieved from SEC EDGAR website

Merrill Lynch & Co. (2006). Form 10-K 2006. Retrieved from SEC EDGAR website

Rhee, R. J. (2010). Case Study of the Bank of America and Merrill Lynch Merger. University of Maryland School of Law. Retrieved from

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“Sunrise in the 9th Century”


Dear ________,

I wonder if the sunrise people see one thousand ago is the same with the sunrise we see today. And I wonder if ancient civilisation is attracted to sunrise and sunset as we do, whether the sky’s exquisite charm has always been the same since the start of mankind. The question came up to me while I was browsing through my old photographs, particularly the one I took on April 2016. As I took so many photographs in my life, I often forget the collection I have, leaving my stunned to find a beautiful photograph I took in the past. Then I remember the trip in details, it was when my father and I toured around Central Java to see Borobudur Temple.

Borobudur is the biggest Buddhist Temple in the world, it was once abandoned for centuries, covered by volcanic ash and jungle surrounding it. It was rediscovered in 1814 when Java was under control of British Empire, then it was restored by the Dutch and preserved until today. On my trip to this ancient temple, I remember waking up early in the morning and walked from our hotel outside the Borobudur complex for about half an hour to the temple. After registering, we were given a flashlight and proceeded to enter the temple along with other tourists wanting to see sunrise from the top of Borobudur.

The air was cold during the dawn, but the wind was calm. There were many stairs to the top of the temple, we carefully manage to climb them one by one in the dark. We reached the top when it was still dark and waited patiently, sitting on the edge of the layered floors facing the East. We could hardly see the surrounding, except few lights far away coming from the villages. Then the sun starts to ascend behind the mountain and lights the trees and stupas, it was during that time I took this photograph. Facing certain direction, there were only nature to be seen, neither electrical cable nor telco tower was in sight. Somehow, I want to believe that the landscape I saw is the same landscape ancient civilisation see in their lifetime.

Your friend,



This photo is available for sale (in digital format and prints), for inquiry contact

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Tugu Kunstkring Paleis Review

Finding new place to eat in Jakarta could be hard sometimes, especially inside a shopping mall. Every week my family and I have to ask each other on where to eat for lunch and dinner, the pattern is repetitive each week. So this month we resort to Tripadvisor on where to dine in Jakarta, we have been using the app when we travel abroad, such as when we traveled to Myanmar and Cambodia, but we never actually use it to find restaurant in Jakarta. We found Tugu Kunstkring as #17 from 6000 something restaurant in Jakarta, since it is located in Menteng, which is near our resident, we decided to give it a try.

ky170246Dining table on the second floor of Tugu Kunstkring

The building exterior looks old but well taken care of, and the Dutch writing on the white wall gives an impression of the 40’s. Once you enter the reception you could feel the glamorous and exquisite decoration around the room. We were asked to sit and waited for a minute while the waitress prepare our table. One thing that catch my attention was that it is prohibited to take photos without the manager approval. But later on, when I draw my camera from a bag, the waitress happily told me that I’m allowed to take pictures. We thought that we were there only to eat, but we were wrong, we were actually enjoying the decoration and ambience more than the lunch itself.

Here’s some history of the building taken from Tugu Kunstkring website:

“The grand historical building originally housed the Fine Arts Circle of the Dutch East Indies (Nederlandsch-Indische Kunstkring of the Dutch East Indies) and was opened on the 17 April 1914. This organization was founded for the first time on 1 April 1902 in Batavia, with the purpose to promote the practice of and the enthusiasm for the fine and decorative arts of the Indies. This building had various functions, as it stayed faithful to its mission to promote anything related to the arts. It featured various creative arts between 1934 and 1939 as well as world-class masterpieces of Vincent van Gogh, Pablo Picasso, Paul Gauguin, Marc Chagall and the likes. One of the wings of this building also housed a very popular café that sold fine food and wine, known as Stam en Weynes.” -Tugu Website

ky170252Dining table on the second floor of Tugu Kunstkring

“In April 2013, this legendary building of Bataviasche Kunstkring has been reopened under the name the TUGU KUNSTKRING PALEIS, and brought back to life by Tugu Hotels & Restaurants Group. Without changing the beautiful palatial architecture, Tugu has breathed in new life into the building through majestic interiors, filling it with a vast collection of beautiful artworks, in creating an atmosphere that represents Tugu’s mission: the art, soul and romance of Indonesia. The Tugu Kunstkring Paleis is a proud center of art exhibitions, as well as other events with high appreciation to the beauty of arts and history. It also houses a large event space with the capacity up to 1000 people, a gallery/shop that features beautiful artworks, jewels, lifestyle products and other design items, a fine restaurant, a grand elegant lounge as well as a tea house.” -Tugu Website

ky170281Dining table on the second floor of Tugu Kunstkring

After being seated on our table, we take a careful look at the menu (which could be hard due to the lack of proper lighting condition). We ordered fish roll with tamarin, rundvless kleine, sayer lode pepaja, and nasi poeti Tjiandjoe. The time of serving could be quite long, but it was for a good reason. We were asked if we want to tour around the building and we did. Other than the main dining hall on the first floor, there is also a shop selling Indonesian gifts and arts on the side of the building. The items sold was similar to those you could find on Malioboro street in Jogjakarta, but I believe it was more carefully selected and have a higher grade than the street items. After touring the shops, we were told that there is an art exhibition related to paintings of rooster on the second floor (it was near Chinese New Year). The artist and promoter were glad to take us around the hall. It took us about 20 minutes to tour the building before we got back to our table and drink our ice tea.

ky170292Dining table on the second floor of Tugu Kunstkring

Not long after we were seated a waiter served our rice, which is wrapped by a leaf. A hungry grown man certainly won’t be satisfied with the amount of serving in this restaurant, but ordering additional rice is quick enough. The rendang is not as tender as I expected from restaurant in this class, but it was tolerable. The rest of the meal was good. I could recommend a tastier Indonesian restaurant in Jakarta, but nothing beats the ambience and dining experience in tutu Kunstkring.

ky170293Nasi Poeti Tjiandjoe

ky170295Rundvless Kleine (or Rendang)

ky170296Fish Roll with Tamarin

ky170298Sayoer Lodeh Pepaja

Halfway through our meal, there were dances by the waiters serving a group of big family. They are dancing with Indonesian music and entertain the guest around, it last about three minutes before the music stops and everyone continue their lunch.

ky170301The waiters dancing while serving meal for a big family

ky170306The waiters dancing while serving meal for a big family

Overall, I would recommend tourist and local alike to dine at Tugu Kunstkring at least once to feel the ambience of dining in Indonesian heritage site. For me, it was a refreshing experience to reconnect with Indonesian history. And it wasn’t very expensive either, for a three person meal, we spent Rp 503.580 after tax.

Tugu Kunstkring:

Jl. Teuku Umar 1 • Jakarta Pusat • Indonesia
Tel. +62817 158 181 • Fax. +62 21 390 0898

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SATOO at Shangri-La Jakarta Review

“SATOO is all about the culinary exploration of Asian and international cuisines. Chic and modern are the first impressions one gets upon entering the casual cafe area and seeing the dessert station featuring a chocolate fountain and an irresistible display of cakes, pastries, souffles, ice creams and jajanan pasar (traditional Indonesian snacks).

There are 12 interactive open kitchen stations featuring various types of cuisines and dishes, including Indian, Western, Chinese, Indonesian, salad, sushi, sashimi, barbecue, noodles, pasta, desserts, fruits and jamu (traditional Indonesian herbal concoctions).” – Shangri-La Website

ky170228Italian Pasta Section at SATOO

Two weeks ago I came back to have a lunch in Satoo at Shangri-La hotel in Jakarta, this wasn’t my first visit to the restaurant, in fact this may be the tenth or so visit I did. In the past, BCA credit card used to have a buy 1 get 1 promotion for the buffet and my family would dine at Satoo once a month or so. But then the promotion got expired and we found it rather not worth it to pay the full amount, however BCA promotion resurfaced again this month after a long time of break. Since I haven’t posted anything about the restaurant in the past, I thought I could give an overview to prospective customer about dining at Satoo.

The restaurant is located near the swimming pool and built by glass instead of wall, allowing lights to enter the restaurant but not necessarily makes it hot inside. There are a little bit too many tables in the centre of the restaurant (especially near the sushi bar), sometimes making it difficult for us to get back to our table after taking a meal.

ky170225My first dish: Lobster, lemon rice, red snapper, lamb curry, chicken tandoori

ky170226My first dish: Lobster, lemon rice, red snapper, lamb curry, chicken tandoori

Usually I started with sashimi during a buffet, but since the queue was long, I decided to wander around the Indian cuisine section and was surprised to found a baby lobster. I also have some lemon rice, lamb curry and tandoori chicken. The lamb and chicken were delicious, but I found the lobster to be mediocre and not as good as the one in Edogin at Mulia Hotel.

ky170227Fresh seafood and salad bar section at the middle of the restaurant

ky170230Dishes at the Main Section

The great things about Satoo this the variety of the main course, whether it’s Indonesian or Asian, they got it covered. I found it interesting that they serve a pecking duck (with duck skin instead of meat inside), which could not be found in most other buffet restaurant. Although sometimes they cheated by also putting duck meat inside the wrap.

ky170231Noodles Section

ky170232Chinese food section

ky170234Indian food section

ky170235Indian food section

The most interesting section for me is the grilling section, where they served beef, squid, grilled vegetables, bread and butter. For a mass production of meat, they do make it tender and tasty. Combined with bread and butter, I found it delicious and comparable with those steak served at fancy restaurant (not Angus House level though).Nevertheless, well done!

ky170241Grill Meat and Vegetables Section

ky170239Fruits Section

I found something funny this time, in the fruits section, there’s a small chalkboard with the writing “juice for Rp 50.000”. I felt violated reading it. First of all there are plenty of fruits you could take for free and eat it in your table, but you know what, if you want to make it a liquid, then you have to pay us Rp 50k. I was joking with mom to bring our own juicer (they have electrical socket under our table) and charged Rp 35k for the customers. Unfortunately I didn’t see anyone drinking juice at Satoo, perhaps they found it ironic as well. This is an antithesis of letting ice cube melts in your glass so you can have free ice water (luckily Satoo provide us with free water during our meal, so I don’t have to do it).

ky170238Dessert Section at SATOO

Dessert was all great, there were varieties from cake to ice cream. I simply can’t handle all of them, since I had eaten so much main course during our two hours lunch. Overall, Satoo is a great restaurant with a good ambience offering variety of Asian cuisine. There are things to be improved, such as the table layout. The staff were also very nice and attentive to our needs. It’s not the best restaurant in Jakarta, but I would be glad to recommend it for casual lunch or dinner.

ky170237Dessert Section at SATOO

ky170236Dessert Section at SATOO

And oh, we spent about Rp 700k for three person meal using BCA promotion.

(62 21) 2939 9562

Buffet hours:Breakfast
6am – 10am (Weekdays)
6am – 10.30am (Weekends and Public Holidays)Lunch
12noon – 2.30pm (Weekdays)
12noon – 3.00pm (Weekends and Public Holidays)

6pm – 10.30pm (Sunday to Thursday)
6pm – 11pm (Friday and Saturday)

Dress Code

Smart Casual

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The Game: Applying for Graduate School

This post is about my progress in applying for a finance graduate study in North America as an international student, some of you may relate and hopefully found things that is helpful in your journey.

It has been a while since I posted “How to get GMAT 660 in 3 Months by Yourself“in the second semester of last year. For the note, I also retook TOEFL iBT exam and got score of 111/120, a significant improvement from 98/120 I got on January 2016. I did my GMAT at October 31st and it took two weeks for my score to be sent to the school I registered it to. I knew it because Syracuse University (in New York) sent an email two weeks after the test, telling me that they got my score and invite me to begin my admission process. I register my score to one top school in Canada and four second tier school in US. In reality, I only applied to three school, the one in Canada and two other in US, Syracuse is not one of them (I found it too expensive and the living cost is high as well). I filled the required data, upload my undergraduate degree academic report, ask for recommendation letter to two of my lecturer, and paid the admission fee before November 15th, the first deadline for one of the school I applied to.

Days passed by, then months, and eventually year. During the 2016 Christmas holiday, I spent my time with my father traveling to Cambodia, while my mother visited my sister in Omaha, Nebraska. We rode a bamboo train in Battambang, join the crowd at New Year’s Eve in Pub Street, and saw the first sunset of 2017 in Angkor Wat. It was a personally refreshing trip for me, after taking (and passing) CFA Level 1 exam earlier in June and FRM Level 1 exam in November, not to mention doing my Master of Management degree in Binus Business School.

For two and a half months, or 78 days to be exact, there was nothing. I checked on my application every week or so, only to find that the status was always “submitted” instead of “decision made”. Then, on Wednesday, February 1st, I’m anxious to found two email from two of the school I applied to. One is an admission interview invitation, coming from the top school in Canada. The other one is an acceptance letter, along with scholarship offer, coming from the school in US. I was really, really excited that morning and share the excitement with my mother in the kitchen. Later on, I learned that the scholarship will save me half of the tuition fee, in exchange for my time and effort in the graduate assistantship program. I am already happy and excited for getting accepted, so a scholarship adds up tremendously to my excitement. It was an accomplishment for me personally, something I have never achieved before in my life. For the note, I am just an average student in my undergraduate study (medicine), with no significant academic accomplishment.

Anyway, for the Canadian school invitation, I did the interview the next day with one of the university professor via Skype. He told me to give an introduction and asked me how I select stocks for my equity portfolio. The rest of the conversation was more casual and laid back, then I was given a chance to ask few things about the program itself. I think I did good on the interview, but let’s see at the result announcement next week. I only have 10 days to accept/decline the admission and scholarship for the school in US, so I have to make a quick decision if I got admitted in the Canadian school. Up to this time, I whole-heartedly want to study at the Canadian top school, even if that means sacrificing the scholarship from the US school. The program and practical approach would complement my heavy theoretical study I have been doing. On the other side, taking the scholarship would ease the financial burden significantly. But what about the present value of higher future earnings? Going to the top school might enhance my salary base significantly once entering the workforce, hence it might be having higher Net Present Value (NPV).

Now, my mind focus on the chance of getting accepted given that I got admission interview. Articles in the internet varies in their conclusion, some said that once you got an interview offer, you have at least 50% chance of getting admitted. Even others said that the chance could be as high as 75%, which gives me a high hope for admission. Now that I’m almost at the end of the “searching and applying to graduate study” phase, there are several points that I would do if I could do it all over again (although I don’t want to):

  • Prepare earlier, the earlier the better. I prepare from zero 5 months before the first admission deadline, beginning with looking for school (1 month), studying GMAT (3 months), and uploading transcript (1 month). Note that I didn’t work at the time, so for those of you having daily job, it will absolutely takes at least twice my number. Ideally if I spare more time and do it in 8 months before the admission deadline, I might get higher GMAT score than 660 (perhaps 700-ish?) and have more time to upload the transcript (sending the official transcript from outside US to US takes about 1-2 weeks).
  • Be selective with your school choice. During the first month of preparation, I listed all the school with Master in Finance program in US, Canada, and Western Europe. Then I eliminated the school based on the study period (I want a 1 year only program), tuition cost (US$ 40.000 is the maximum amount my family could afford), and lastly the rating (I want it to be in the top 100). It left me with less than 10 school, and I choose three among them to avoid making too much essay and asking too many letters of recommendation, which could be frustrating sometimes. My choice falls into one top Canadian school, then 24th best and 73rd best for MS in finance program in US.
  • Know your GMAT score target. After selecting the school you want to apply for, look at their student profile (age, % of international student, GMAT, GPA, work experience). There is perhaps nothing you could do to improve your undergraduate GPA, but there are lots you could do to improve your GMAT score. If the school average GMAT score is 670, then it is safe to assume that score of  above 650 is not a disadvantage for you. However, if the school average GMAT is 720, then you may want to get at least 700 for your peace of mind.
  • Write your essay by tailoring it for each school. This is why it is counter-productive to apply to as many school as possible, focus and unique selling proposition are the name of the game. Read and adhere to the essay requirement, make sure it is easy to read (play with the space and margin).
  • Ask early for letters of recommendation. Almost all school ask for two recommendation letters, although few ask for three. I asked mine to my thesis supervisor and a close lecturer, who both gladly agree. They have to sent their recommendation directly to the university’s email, so make sure you have bought the admission form and register their email as your recommendation giver.
  • Be VRIN (Valuable, rare, inimitable, non-subtitutable). No bragging, but here’s my profile, your profile will most likely be very different, but that is what makes you unique as well.
    • Valuable: I passed CFA level 1 exam 4 months before applying,  I like to think it is a prove that I’m serious in learning finance. Those that participate in CFA program knows how rigorous and challenging the material is, and that is a valuable asset for me.
    • Rare: How many medical student pursue career in finance? It is a major shift in my study, getting out of my comfort zone was not easy at the time, but when my passion is calling, I know it may not give me a second chance if I didn’t take it at the time. I’m glad I did.
    • Inimitable: I have been involved in equity trading since I was in undergraduate study, by the time I’m applying for the admission, I have been managing equity portfolio for over 4 years. I’m 22 years old by the way.
    • Non-subtitutable: I always believe that nothing is as important as hard work and determination. I know what I want and I know what it takes to get it, the next question is, am I going to do what it take to get it?
  • Ask yourself “Why” from the start, then you’ll manage any “How”. Be honest on why you want to pursue further study, that way, every time you are tired and missing on your study target, you’ll be motivated to catch up.
  • Drop the weight that chained you down. Having as little burden as possible is a big plus for me, whether it is a mandatory work hour, spouse, home chores, etc. Remember that it won’t be permanent, perhaps only for 4-12 months.

And lastly, remember that “Hope” is a powerful ally. Imagine the possibility you could unlock afterward, things you could only think of previously. Think of your journey not as the phase of applying for graduate study, but as a progress toward making your dream comes true. Because it is.

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