JAKARTA (TheInsiderStories)–PT Bank Tabungan Pensiunan Nasional (IDX: BTPN) and PT Bank Sumitomo Mitsui Indonesia (SMBCI) officially started a merger process and targets its completion by January 2019.
BTPN and SMBCI’s Commissioners approved the merger plan on August 1, 2018. The companies will submit the merger proposal to the Financial Service Authority today (02/08) and expected to get approval by October 1, 2018.
The companies will conduct an extraordinary shareholders meeting on October 5, 2018. According to the prospectus released today (02/08), SMBCI will merge into BTPN as the recipient entity.
The merger will increase the BTPN to BUKU IV category or have a core capital of Rp30 trillion. “The merger will support FSA’s target in banking consolidation,” BTPN’s Board of Directors said on Wednesday (1/8), as quoted by Kontan.
Both BTPN and SBMCI are subsidiaries of Sumitomo Mitsui Banking Corporation (SMBC). SMBC owns 40 percent share in BTPN and 98.48 percent share in SMBCI.
This merger will expand BTPN’s business to corporate or wholesale segments from the current focus on retail segments. It also accelerates BTPN’s plan to expand its business to the Southeast Asia market.
BTPN has an asset of Rp93.7 trillion by May 2018, while Sumitomo recorded Rp85.1 trillion in the asset. The merger potentially increases the both companies’ assets to Rp178.8 trillion and push BTPN to national top 10 banks. BTPN will overtake OCBC NISP position as the 8th biggest bank in Indonesia.
After the merger completed, BTPN’s Deputy President Director Ongki Wanadjati Dana will serve as President Director and Kazuhisa Miyagawa will serve as Deputy President Director.
BTPN Booked Rp1.09 trillion in net income in the first semester this year, a 17 percent rise from Rp935 million in the first semester last year.
President Director of BTPN Jerry Ng earlier said the bank recorded profit increase amid low credit disbursement that decreased 2 percent to Rp67.8 trillion in the first semester this year from Rp66.3 trillion in the same period last year.
The company’s assets grew 3 percent to Rp99.9 trillion in the first semester this year with capital adequacy ratio (CAR) recorded 24.1 percent. The company booked 1.13 percent in non-performing loan (NPL) in the first semester of this year.
BTPN claimed to reduce operational cost by 12 percent to Rp2.40 trillion in the first semester this year from Rp2.73 trillion in the first semester last year by implementing digital transformation.