JAKARTA (TheInsiderStories) – Industrial Bank of Korea (IBK) officially owned 95.79 percent of Indonesian lender PT Bank Agris Tbk (IDX:AGRS). Followed the compeletion, IBK intends to merge the bank with other publicly listed lender, PT Bank Mitraniaga Tbk (IDX: NAGA).

On February, 2018, the Korean bank announced to obtain 4.59 million shares or 87.34 per cent of Bank Agris fully paid capital from the seller PT Dian Intan Perkasa (owned 82.59 percent shares), Benjamin Jiavaranon has 0.28 per cent, and public 17.13 percent.

The bank, which is majority owned by the South Korean Government, has also acquired 71.68 percent of Bank Mitraniaga’ shares of 1.15 billion shares by Willy Yonathan and 10 million shares of Yeo Harry Yonathan. Beside IBK, PT Sarana Steel remains 9.89 percent, Kamtono Kosasih 5.105 percent, Yonathan is one percent and public shareholding 12.32 percent at the bank.

This merger is a consolidation effort that is being pushed by the agency cause, currently the banking industry competition has expanded, to the financial technology industry. The existence of increasingly fierce competition will endanger small banks in business groups Book I and II.

Indonesia’s economy will continue to face severe challenges in 2018, not only come from within the country itself but as well from a poor global economic environment.  Entering a political year in 2019, the Financial Services Authority (FSA) is optimistic it will see a revival of both, the global and domestic economies, to support the banks in their quest to achieve double-digit growth.

Indonesia’s recent credit demand condition has signaled a mixed response for the banking sector’s future in 2019, especially in term of loan growth projection. Nevertheless, Bank Indonesia (BI) has prepared numerous policies to spur the Indonesian economy.

The central bank is preparing new rules to ensure the banks are able to manage liquidity better, to boost loan growth to 10-12 per cent in this year. The consolidation bank in the country is expected to help the banking industry grow faster.

The Industrial Bank of Korea’s business plan in Indonesia is the financing of micro, small and medium enterprises.

Written by Staff Editor, Email: theinsiderstories@gmail.com