Indonesia to Merge Three Islamic Banks

Photo: Courtesy

Jakarta, MINA – Indonesia will soon have the largest Islamic bank nationally and globally through the merger process of three state-owned enterprises Islamic banks.

The three Islamic banks that will be combined are Bank BRI Syariah, Bank Syariah Mandiri, and Bank BNI Syariah. The three banks will be merged into one entity within the BRI Syariah Bank.

Deputy Director of BRI Catur Budi Harto said that on Tuesday, the merger process would make the syariah bank resulting from the merger have a wider reach so that it could attract local and global investors.

The new Islamic bank is expected to work on the Indonesian halal industry business, which has the potential to reach IDR 4,800 trillion by 2024.

“Many investors are looking forward to this monumental step because the economic and financial potential of sharia as well as the halal industry in Indonesia could reach IDR 4,800 trillion in 2024,” said Catur, in a virtual press conference on Tuesday as quoted from Anadolu Agency.

Currently, the merger process has entered the Conditional Merger Agreement (CMA) stage or the initial merger agreement.

Furthermore, on October 20 or 21, the government will announce the merger process and request merger permission from the bank supervisory authorities, namely the Financial Services Authority (OJK) and the Indonesian capital market authority.

“Then, in February 2021 there will be a legal merger as a process of merging three Islamic banks officially,” said Hery Gunardi, Head of the Project Management Office Team and Deputy President Director of PT Bank Mandiri (Persero) Tbk.

The merger process is targeted to be completed in the first quarter of 2021, said Hery.

Hery said the merger result will make the new Islamic bank into the top 10 Islamic banks globally by market capitalization.

“After the merger is completed in the first quarter of 2021, the merged Islamic bank will have total assets of Rp. 225 trillion and will occupy the 8th position in the largest banking sector in Indonesia,” Hery explained in a virtual press conference on Tuesday.

He said that in 2025 the merged Islamic bank is targeted to have assets of up to Rp390 trillion, with a financing target of Rp272 trillion and funding of Rp335 trillion.

Hery explained why Bank BRI Syariah became a survivor bank or entity that received the merger of the three Islamic banks. One of the reasons is because BRI Syariah is the only state-owned sharia bank that has been listed on the stock exchange.

No wonder the news of this merger has boosted the share price of BRI Syariah bank on Tuesday. BRI Syariah’s share price strengthened by 25 percent to Rp 1,125 per share. The increase in share price touches the upper limit of auto rejection.

Based on trading data from the Indonesia Stock Exchange (IDX), the transaction value of BRIS shares for a day reached IDR 981.06 billion, almost reaching IDR 1 trillion. The volume of shares traded reached 908.01 million shares. (T/RE1)

Mi’raj News Agency (MINA)