South Korean Kookmin Buys Bukopin’s Shares for US$108M

Bukopin Head Office in Jakarta - Photo by Bukopin

JAKARTA (TheInsiderStories) – South Korean bank, KB Kookmin Bank to buy 22 percent shares of Indonesian lender PT Bank Bukopin Tbk (IDX: BBKP) for Rp1.55 trillion (US$108.81 million), said its president director on Monday (23/07). Previously, the bank announced to offer over than 20 percent to foreign investor.

Eko Rachmansyah Gindo, the president director has told TheInsiderStories  the bank in the process to finalize the rights issue of 2.73 billion shares or 30 percent of enlarge capital at price of Rp570 per shares.

Director of Finance & Planning Bukopin M. Rachmat Kaimuddin adding, after obtaining the effective statement of the rights issue from Financial Service Agency on June 29, the bank now focus on the process of the rights issue with a predetermined schedule.

In accordance with the schedule, the securities trading transaction will be done on July 13 to 25. Subsequently, the delivery of shares and preemptive rights payments will be made on the 26th July and payment from standby buyer will be made on July 27.

The bank aims to improve its capital adequacy ratio to 14 percent through its right issue, from 11.09 percent at first quarter (1Q) of 2018 (versus 13.48 percent in 1Q 2017). Yet, remain open to other option such as sub-debt to increase its capital adequacy ratio.

This right issue also will boost corporate capacity to expand its loan. As the end of the first quarter of 2018, the lender disbursed 71.8 trillion (rise 4.4 percent from 67.9 trillion Indonesia rupiah at 1Q 2017).

One of the effort to increase its loan disbursement is the flexy bill, the loan that was given to the company such as hotel and textile company to finance their electricity bill. So far the lender has disburse 200 billion flexy bill loan.

Bank Bukopin hold a rights issue to strengthen its capital and expand its business. Recently, Indonesian Financial Service Agency is scrutinizing Bukopin’s last year financial statement, due to an issue of financial record manipulation.

The company was suspected to providing misleading information related to the company’s financial statements. This include inaccuracies in reporting credit card receivables. The financial statement discrepancies were responded negatively by investors with the decline in the price of the shares of the lender.

Bank Bukopin posted poor performance last year, with profit was down 54 percent to Rp112.37 billion (US$8.14 million) from Rp248.95 billion in 2016, driven by the bad performance of disbursed loans. The bank’s non-performing loans (NPL) gross increase to 8.54 percent from 3.77 percent.

By the end of 2017, the capital adequacy ratio fell to 10.51 percent from 11.37 per cent, while Return on assets only 0.09 per cent, below banking industry at 3 percent.

The bank is eyeing between 10 and 15 percent growth in profits this year as it expects loans to grow between 5 and 10 percent.

The company’s loan growth target for 2018 was 8 percent, citing political considerations resulting from the regional elections this year and general and presidential elections in 2019.

As of November 2017, Bank Bukopin had disbursed Rp. 70.17 trillion in loans, a 3.07 percent year-on-year (yoy) increase compared to the figure in 2016. It booked Rp. 723.01 billion in profits, down 30.38 percent from the figure in 2016.

Currently, Bosowa Corporindo, part of Aksa Mahmud’s Bosowa group, controls 30 percent of the shares in Bukopin. Kopelindo, the staff co-operative at state procurement agency by state-owned logistic firm Perum Bulog has 18.09 percent of the bank’s shares and the Indonesian government 11 percent. The remainder of the shares are publicly owned.

After the rights issue, Bosowa Corporindo shares will diluted to 23 percent from previously 30 percent and Government of Indonesia 8.76 percent or reduced from 11.43 percent.

Written by Staff Writer, Edited by Linda Silaen, Email: