JAKARTA (TheInsiderStories) - State Own Enterprises (SOEs) Ministry will set up the biggest holding financial institution in Indonesia by restructuring and adding new units under a new holding company. The SOEs Minister Rini Soemarno said her office will establish six new holding companies (holdco) in a number of sectors, namely financial, energy, mining, toll road, real estate, construction and engineering.
Gatot Trihargo, deputy SOEs Minister said that PT Danareksa (Persero) will become holding company for financial companies. Banks that will be under the holding company will be PT Bank Rakyat Indonesia (IDX: BBRI), PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Mandiri Tbk (BMRI), PT Bank Tabungan Negara Tbk (BBTN), pawnshop firm Perum Pegadaian, venture capital firm PT Perusahaan Nasional Madani and new unit Information technology and asset management.
He said as part of the financial restructuring of the financial institution, the SOEs Ministry will also re-organize the banks business and transferring PT Bahana Usaha Pembinaan Indonesia (BPUI) to Bank Rakyat Indonesia and unit of Danareksa to Bank Negara Indonesia. This, Gatot said, will reduce competition between state-owned banks.
BPUI was established in 1973, with 100% shares owned by the Indonesian government through the Ministry of Finance. The initial and main mission for Bahana is to develop the real sector through finance provision to Small Medium Enterprises (SME) and Cooperatives.
Today, BPUI has become the backbone and the holding company of the Bahana Group, providing complete and innovative financial services through their subsidiaries such as investment banking, securities trading and brokerage PT Bahana Securities; venture capital PT Bahana Artha Ventura, asset management PT Bahana TCW Management and office building management PT Graha Niaga Tata Utama.
While, Danareksa is a pioneer in Indonesian financial institution and was the first to introduce mutual funds in Indonesia. It was also the first to launch a US Dollar-denominated fixed-income fund and promote syariah-based investments.
The investment holding will manage investment banking through PT Danareksa Sekuritas, investment management via PT Danareksa Investment Management, structure products and finance through PT Danareksa Finance and other financing, private equity and fund creation via PT Danareksa Capital.
At the same time, said Gatot, the government will integrate the IT system of state-owned banks to be more efficient. Currently, Gatot admitted, the banks under Association of SOEs Bank (HIMBARA) are in talks with telecommunication operator PT Indosat Ooredoo Tbk (IDX: ISAT) to acquire Indosat unit PT Artajasa Pembayaran Elektronis.
The new IT company unit, Gatot said, will become the pioneer of national payment gateway (NPG) to manage the payment system for the country. The next step is to further strengthen the banks business, He added the government wants the state-owned bank to acquire the regional banks.
“We are targeting that all the plans will be settled this year. We form holding companies to make SOEs more agile, stronger and bigger. We still have Dwiwarna shares so the government still has voting rights,” he said.
Gatot added, with this new holdco, the state-owned banks can leverage lending activities from Rp450 trillion (US$34.09 billion) at present to Rp650 trillion by 2017.
Currenty, Gatot said, the four banks have merged their automated teller machines (ATM) network and set up a single switching company to manage the system. The consolidation is expected to help cut operational costs of the banks by up to Rp6.8 trillion ($489.21 million) per year.
Chairman of HIMBARA Asmawi Syam said, in the first phase, there will be 50 Himbara ATMs in Greater Jakarta followed by 800 consolidated ATMs in 2016. The new system will cut ATM operational costs for the banks as well as reduce customers transaction cost up to 75 per cent. Till December, state banks own 55,804 ATMs across the nation.
Chairman of the Financial Services Authority (OJK) board of commissioners Muliaman D. Hadad said, the synergy is very important since the state-owned banks accounted for 50 per cent of the assets in the banking industry. (*)