JAKARTA (TheInsiderStories) – Local lender PT BRI Agro Tbk (IDX: AGRO) announced that it has allocated Rp 1 trillion (US$70 million) to acquire two small banks as part of a strategy to accelerate its growth.
Currently Bank Agro is categorized as a Buku II bank with a core capital of Rp 3.1 trillion. The bank’s parent company, state-owned lender Bank Rakyat Indonesia (IDX: BBRI), has issued an instruction for the acquisition of two banks to be carried out.
BRI Agro is looking at investing almost Rp 600 billion for the first acquisition. The lenders involved are currently engaged in talks regarding the deal, and have yet to report to Financial Service Authority about the planned move. Bank Agro will continue to focus on agribusiness sector as it expects its network and customer base to expand following the acquisition.
The bank raised the funds (Rp 1 trillion) for the acquisitions through a rights issue scheme from which the bank also managed to add around Rp 1.9 trillion to its core capital.