INDONESIA - BANKING - BRI Targets Brokerage in Expansion Push

www.thejakartaglobe.com - Bank Rakyat Indonesia, the second-largest lender by assets, is close to acquiring a local brokerage company.

BRI, which focuses its lending on small- and medium-size companies, has been scouring the country’s financial markets for months to find the right brokerage. It has narrowed the candidates down to two.

“We have to complete the acquisition this year,” BRI’s president director, Sofyan Basir, said last week, without naming the potential targets.

The move is geared toward keeping BRI on par with two of its biggest competitors, Bank Mandiri and Bank Negara Indonesia. Mandiri, the country’s largest lender by assets, already has a brokerage unit in Mandiri Sekuritas. So does Bank Negara, with BNI Securities. (full story)


BRI has aggressively sought to keep pace and expand during the past five years.

In 2007, the lender bought a majority stake in Bank Jasa Arta. In 2008 it spun off Bank Jasa as a stand-alone Islamic bank that adheres to the interest-averse principles of Shariah lending. The bank is now called BRI Syariah.

And in 2010, BRI purchased an 88.6 percent stake in Bank Agroniaga for Rp 330.3 billion ($35 million).

Bank Indonesia, the central bank, has since 2005 encouraged lenders to consolidate through mergers and acquisitions, although it has had little success in that regard. There are now 122 commercial banks operating in Indonesia, serving a population of more than 240 million.

Sofyan said that BRI would finance the acquisition with its own cash.

Although Sofyan didn’t name the targets, local media reports have suggested that they might be Bahana Securities and Samuel Securities.

Bahana Securities, a unit of Badan Pembinaan Usaha Indonesia, has been in limbo since it failed to sell its stake in Garuda Indonesia in the national carrier’s capital debut last year.

Bahana and two other state-controlled brokers, Danareksa Sekuritas and Mandiri Sekuritas, were stuck with Garuda shares last year after they could not sell all of the ones they owned during the airline’s initial public offering in February 2011.

In April, the brokers finally sold their more than 10 percent stake in the airline for more than $150 million to businessman Chairul Tanjung.

Officials at Bahana Securities and Samuel Securities were not available for comment.

Shares of BRI fell 2.3 percent to Rp 6,450 on the Indonesia Stock Exchange on Monday, the first day of trading during the Ramadan fasting month, which will last until Aug. 19. Trading in the local market typically slows during the fasting month.

Source:  http://www.thejakartaglobe.com/business/bri-targets-brokerage-in-expansion-push/532231 - July 24, 2012