JAKARTA (TheInsiderStories) – State-own lender PT BanK Rakyat Indonesia Tbk (IDX: BBRI) investment company arms, PT BRI Ventures Investama prepared US$250 million funds to develop financial technology (FinTech) businesses, said the director yesterday (09/23).
“As a bank with the largest network in Indonesia, we want to open up opportunities to collaborate with FinTech startups,” said Indra Utoyo, director at the bank on Monday.
Currently, Bank Rakyat Indonesia, launched BRIAPI to bridge between the lender and the growing startup industry. Later BRIAPI will also be a way for BRI to open up potential cooperation with around 50 startups who will later be selected in the Hackhaton event.
End of last year, the largest small and medium enterprises lender become the majority shareholder of BRI Ventures. This transaction is expected to support the state-owned bank’ aspirations to provide integrated financial services.
Bank Rakyat Indonesia acquired 97.61 percent, or 15,874 shares in Rp3.09 billion (US$213,103) of BRI Ventures from PT Bahana Artha Ventura (BAV). The venture capital will be a startup company that has synergistic potential with the Group.
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.
In addition to planning to have a venture company, the bank also plans to have a securities and asset management company. The bank already had several other subsidiaries such as insurance, Islamic banks and finance companies.
Previously, BBRI has announced to acquires two unit of the state-owned financial company PT Danareksa. The lender will acquired 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 in the prospectus.
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 told TheInsiderStories, 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’s 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.
The FinTech industry is growing rapidly in Indonesia. Referring to data released by AFTECH, from 235 FinTech firms, the payment sector recorded the largest portion at 39 percent and lending sector at 32 percent in 2018. Of this amount, there are currently various FinTechs working with the bank including GoJek, Shopee, Tokopedia, Funds, Investree, and others.
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