JAKARTA (TheInsiderStories) – PT Bank IBK Indonesia Tbk (IDX: AGRS), a local lender owned by Industrial Bank of Korea (IBK), plans to releasing new shares up to 7.28 billion shares to strengthen the capital and fulfill the free float shares requirement, the management announced on Monday (03/22). The company has set the indicative price for the rights issue at Rp170 a share or in total Rp1.23 trillion (US$85.94 million).
According to the director, Vera Afianti, the parent only exercise the preemptive rights up to Rp999.99 billion of the total issuances. After the transaction, IBK ownership will changed from 97.50 percent to 90.91 percent. Then, PT Dian Intan Perkasa changed from 0.47 percent to 0.29 percent, Willy Yonathan shrank from 0.16 percent to 0.10 percent, and public rose from 1.68 percent to 7.88 percent.
Earlier, Bank IBK Indonesia has announced to become a BOOK 3 category and having core capital starting more than Rp5 trillion. Therefore, the controlling shareholder plans to add capital in stages until 2023. Last year, IBK has injected funds Rp700 billion and made the unit’ core capital was Rp1.4 trillion.
In the fourth quarter of 2020, there was another injection of Rp1 trillion and increased the lender’ core capital raised to Rp2.4 trillion. The planned, in the fourth quarter of 2021, the controlling shareholder to inject Rp1 trillion of new capital so that the core capital climbs to Rp3.4 trillion. In 2023, it is planned that the controlling shareholder will re-deposit capital of Rp2 trillion, said Afianti.
The merged bank between PT Mitraniaga Tbk (IDX: NAGA) and PT Bank Agris Tbk has operated on Sept. 5, 2019. On August 23, Bank IBK Indonesia, as the result of merger began the first day of trading. On February, 2018, IBK obtained 4.59 million shares or 87.34 per cent of Bank Agris from the seller PT Dian Intan Perkasa.
The bank, which is majority owned by the South Korean Government, has also acquired 71.68 percent of Bank Mitraniaga’ shares. After the acquisition IBK controlled Bank Mitraniaga with a share ownership of 71.68 percent.
Recently, the Financial Services Authority (FSA) is working on the new policies concerning on the commercial banks and its business activities, said the agency yesterday. Previously the classification under the concept of commercial bank business activities.
The future regulation also regulates the paid-in capital to establish a new bank from a minimum of Rp3 trillion to Rp10 trillion. The new regulation is estimating will change the landscape of the banking industry. One of the crucial points in the proposed legislation is the grouping will no longer be counted by entity but based on the core capital.
The new category are a bank with a core capital of less than Rp6 trillion, up to Rp14 trillion, lower than Rp70 trillion, and more than Rp70 trillion. In the existing rule, the bank categorize as BOOK 1 with a core capital less than Rp1 trillion, BOOK 2 under Rp5 trillion, BOOK 3 has a core capital up to Rp 30 trillion, and BOOK 4 more than Rp30 trillion.
“The provisions related to the operation of bank products, which were originally only related to bank core capital, were adjusted to an approach that was oriented towards customer needs while still paying attention to capital capacity and risk management,” wrote the draft.
This downgrade, said FSA, could slightly reduce bank liabilities. To comply the new policy, the regulator has encouraged banking consolidation by releasing a minimum core capital requirement for banks of Rp1 trillion in this year and gradually will be increase to a minimum of Rp2 trillion in 2022, and at least of Rp3 trillion in 2023.
Last year, the regulator has postponed the implementation of Basel III for Indonesian Bank, as part of the agency’ stimulus for the financial sectors. The policy included the calculation of weighted assets for credit valuation adjustment, operational, credit, and market risk will postponed to Jan. 1, 2023 and the minimum capital provisions until the December 2022 data period.
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