JAKARTA (TheInsiderStories) – Two regional bank in West Java, PT Bank Pembangunan Daerah Jawa Barat and Banten Tbk (IDX: BJBR) and PT Bank Pembangunan Daerah Banten Tbk (IDX: BEKS) will merges. The Financial Services Authority (FSA) said will immediately process the request.
The letter of intent has been signed by Banten governor Wahidin Halim and West Java governor Ridwan Kamil, as the controlling shareholder of the two lenders. Based on the framework, BJBR and Bank Banten will carry out business cooperation, including Bank Banten’ liquidity needs, among others by placing line money market or purchasing assets that meet certain requirements, in stages.
Then, in the process of implementing a business merger, BJBR will conduct due diligence and the FSA requests that the two immediately carry out the stages of the business merger in accordance with statutory provisions.
The agency emphasized that during the merger process, the two banks continued to operate normally serving the reasonable needs of customers and public financial services.
The ability of Bank Banten to score profitably is questioned, since transforming from PT Bank Pundi Tbk in 2016, this bank has never recorded a profit. For years, the lender continues to lose since it was first taken over from a company founded by Sandiaga S. Uno dan Rosan P. Roeslani, PT Recapital Advisors.
After changing hands to the Banten Province, the company’ losses were even deeper. Based on financial statements in 2019, Bank Banten still recorded a net loss of Rp180.70 billion (US$11.66 million). In the same year, the company’ core capital also eroded from Rp334.07 billion in 2018 to Rp154.13 billion in 2019.
The adequacy ration also decreased to 9.01 percent. Inline with the declining capital capability, the company’ credit expansion in 2019 will also under pressure. Loans disbursed were recorded at Rp5.33 trillion, grow minus 3.22 percent in annual basis.
Anugerah Mega Investama director, Hans Kwee rated, the merger was likely a follow-up to the government regulation lieu in law Number 1 of 2020 concerning State Financial Policy and Financial Stability for Handling COVID-19. For Bank Banten, he noted, this consolidation would be beneficial, because it would help his business which had been depressed so far but for BJBR this action might not be too profitable.
In this year, the shares of BJBR have fallen 20.25 percent and Bank Banten have been perched at the level of Rp50. The price hasn’t changed so far this year.
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