JAKARTA (TheInsiderStories) – Bank consolidation through mergers and acquisitions continues in Indonesia. Yesterday, the Financial Services Authority (FSA) revealed that the Industrial Bank of Korea (IBK) will merge two publicly listed local lenders, PT Bank Mitraniaga Tbk (IDX: NAGA) and PT Bank Agris Tbk (IDX: AGRS).
On February, 2018, IBK 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. After the transaction, the existing shareholders was diluted to 1 per cent and the shares owned by the public decreased to 11.66 per cent.
Deputy Commissioner for Banking Supervision III at FSA, Slamet Edy Poernomo, revealed on Tuesday (23/10), that the bank is currently conducting an assessment and filing permits to merge the two banks. He said, the plan is still uncertain.
“Not necessarily (approved), we see first. If it is useful for Indonesia, all rules are fulfilled, yes the time we forbid,” said Poernomo.
The bank, which is majority owned by the South Korean Government, has also acquired 71.68 percent of Bank Mitraniaga’s shares of 1.15 billion shares by Willy Yonathan and 10 million shares of Yeo Harry Yonantha. After the acquisition transaction, the composition of Bank Mitraniaga’s shareholders will change.
IBK will control Bank Mitraniaga with a share ownership of 71.68 percent, PT Sarana Steel remains 9.89 percent and Kamtono Kosasih remains 5.105 percent, Yonathan is only 1 percent and public shareholding is 12.32 percent.
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 1 and 2.
The Industrial Bank of Korea’s business plan in Indonesia is the financing of micro, small and medium enterprises.