JAKARTA (TheInsiderStories) – PT Bank Rakyat Indonesia Tbk (IDX: BBRI), a state-owned lender to acquire 90 percent of local general insurance firm, PT Bringin Sejahtera Artha Makmur (BRINS) shares for Rp1.04 trillion or US$74.28 million, said the management on Tuesday (06/25).
The CEO Suprajarto explained, the acquisition is estimate to be completed on September, 2019. To date, the lender has signed Conditional Sales and Purchase Agreement with BRINS shareholders.
“By this transaction, the plan to have general insurance is one step closer,” he said.
By having the general insurance, the lender will become fully integrated financial company since previously had owned seven subsidiaries namely, PT BRI Syariah Tbk (IDX: BRIS), PT BRI Agro Tbk (IDX: AGRO), PT BRI Life, PT BRI Finance, PT BRI Ventures, PT BRI Remittance and PT Danareksa Sekuritas.
Last year, the largest small and medium enterprises lender, become the majority shareholder of PT BRI Ventura Investama (BRI Ventures). BBRI acquired 97.61 percent, or 15,874 shares in Rp3.09 billion of BRI Ventures from PT Bahana Artha Ventura (BAV).
Previously, the bank has acquired 35 percent of BAV, which is a subsidiary of PT Bahana Pembangunan Usaha Indonesia (BPUI) with worth of Rp71.21 billion. The transaction eroded BPUI’ ownership from 99.45 percent to 64.65 percent and the shares of the BPUI’ Employee Cooperative from 0.55 percent to 0.35 percent.
On September, 2018, the bank acquired two unit of the state-owned financial company PT Danareksa. The lender bought 67 percent share of PT Danareksa Sekuritas for Rp446.88 billion and 35 percent of PT Danareksa Investment Management for Rp371.96 billion or in total worth of Rp818.84 billion.
“Investment in financial institutions is a part of the bank’s non-organic growth strategy that has been stated in the Business Plan 2018-2020 document,” said the bank.
The State Owned Enterprises (SOEs) ministry has plan to set up financial services holding led by Danareksa. A financial services holding company is one of the ‘holding master plans’ offered by the Government.
Gatot Trihargo, the deputy for the SOEs Ministry has said the holding company was planned to be in charge of four state-owned banks, namely, BBRI, PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Tabungan Negara Tbk (IDX:BBTN), PT Bank Mandiri Tbk (IDX:BMRI), and PT Pegadaian.
Consolidation through the establishment of the holding will basically not eliminate the entity of each bank. The country’ banking regulator and the central bank have both been pushing for banks to merge, to shore up equity. The regulators want to halve the number of banks operating across the archipelago from around 120.
The four banks have, under an Association of State-Owned Banks Association, already merged their ATM networks and set up a single switching company to manage the system.
Director of Finance BRI Haru Koesmahargyo had said, Bank Rakyat Indonesia the lender has allocated fund of Rp6 trillion to support un-organic business, with Rp3 trillion to add subsidiaries’ capital and Rp3 trillion to acquire new companies.
The lender also intends to issue bonds of Rp20 trillion that will be divided into three times of issuance; first year will be Rp7 trillion and Rp6 trillion will be in second and third year. For this year, the company plans to issue green bond of $500 million.
As first quarter of 2019, the bank booked net profit of Rp8.2 trillion, up to 10.43 percent from first quarter of 2018. The profit was driven by loan growth by 12.9 percent and fee based income growth by 16.49 percent.
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