PT Bank IBK Indonesia Tbk (IDX: AGRS), the merged banks between PT Mitraniaga Tbk (IDX: NAGA) and PT Bank Agris Tbk will effectively operate on Sept. 5 - Photo by Bank Agris

Jakarta (TheInsiderStories)PT Bank IBK Indonesia Tbk (IDX: AGRS), the merged banks between PT Mitraniaga Tbk (IDX: NAGA) and PT Bank Agris Tbk will effectively operate on Sept. 5, 2019, said its holding Industrial Bank od Korea last week. The merger plan has got the permission from the Financial Services Authority (FSA), the lender said.

As a first step in the merger process, the bank stated, Indonesia Stock Exchange (IDX) will stop Bank Mitraniaga trading starting today until August 22, 2019 until all the bank shares convert into Bank Agris on August 22.

Then, on August 23, Bank Agris as the result of merger will begin the first day of trading. The brand of the merger bank is expected to be approved by the regulator on August 30.

On February, 2018, IBK obtained 4.59 million shares or 87.34 per cent of Bank Agris fully paid capital from the seller PT Dian Intan Perkasa (owned 82.59 percent shares), Benjamin Jiavaranon has 0.28 per cent, and public 17.13 percent.

The bank, which is majority owned by the South Korean Government, has also acquired 71.68 percent of Bank Mitraniaga’ shares of 1.15 billion shares by Willy Yonathan and 10 million shares of Yeo Harry Yonantha. After the acquisition transaction, the composition of Bank Mitraniaga’s shareholders will change.

IBK will control Bank Mitraniaga with a share ownership of 71.68 percent, PT Sarana Steel remains 9.89 percent and Kamtono Kosasih remains 5.105 percent, Yonathan is only 1 percent and public shareholding is 12.32 percent.

This merger is a consolidation effort that is being pushed by the agency cause, currently the banking industry competition has expanded, to the financial technology industry. The existence of increasingly fierce competition will endanger small banks in business groups Book 1 and 2.

The Industrial Bank of Korea’ business plan in Indonesia is the financing of micro, small and medium enterprises. As of July 2019, IBK hold 95.79 percent of Bank Agris shares and owned 71.68 percent of NAGA shares.