Bank Rakyat Indonesia, the country’s second-largest lender by assets, is seeking to buy into a local brokerage company or bank next year in a bid to expand its reach.
The Jakarta-based lender has set aside as much as Rp 2.5 trillion ($278 million) to fund the acquisition, a top executive said on Thursday. (source)
The Jakarta-based lender has set aside as much as Rp 2.5 trillion ($278 million) to fund the acquisition, a top executive said on Thursday. (source)
“We have internal funds of around Rp 2 trillion to Rp 2.5 trillion, which we will use to fund the acquisition of a financial institution,’’ said Sofyan Basir, the bank’s president director.
Bank Rakyat, established in 1895, has been scouting brokerage companies and banks as acquisition targets. Sofyan said he would prefer a securities house as its immediate target.
“The securities business is interesting and we are targeting a brokerage company,’’ he said.
Many analysts believe the Indonesian stock market will continue to grow next year. The country’s benchmark stock measure, the Jakarta Composite Index, surged 46 percent last year when the economy expanded by 6.1 percent. The JCI has risen 2.4 percent so far this year, with the economy forecast to expand 6.5 percent for 2011.
Many Indonesian banks have been aggressive in acquiring local companies.
Bank Rakyat has made several acquisitions in recent years. In 2010, it bought control of Bank Agroniaga for Rp 150 billion, though last month announced its intention to sell up to 14 percent. In 2007, it spent Rp 62 billion on buying Bank Jasa Arta, which it converted into an Islamic bank in 2009 to tap growing demand for Shariah banking services.
The central bank has been coaxing the nation’s 120 lenders to combine through mergers and acquisitions on the premise that bigger institutions will be better able to withstand financial shocks. Indonesia spent more than Rp 450 trillion bailing out the banking industry during the 1997-98 Asian financial crisis.
Analysts in Jakarta said many Indonesian lenders have benefited from a low-cost borrowing environment. The central bank this month cut its policy rate by 50 basis points to 6 percent, the lowest level since the rate was introduced in July 2005.
Net income at Bank Rakyat rose to Rp 10.4 trillion in the nine months through September from Rp 6.7 trillion in the same period last year. Net interest income, or the interest earned on borrowers after interest is paid to depositors, rose to Rp 26.7 trillion over the period from Rp 21 trillion in the same period a year earlier.
Shares in Bank Rakyat fell 2.2 percent to Rp 6,800 on Thursday. The shares have risen 30 percent so far this year.
No comments:
Post a Comment