Indonesia’s Bank Jabar to buy 51 small banks
JAKARTA, June 14 — PT Bank Pembangunan Jawa Barat & Banten (BJBR), Indonesia's biggest provincial lender, plans to buy a majority stake in 51 rural banks this year as it aims to tap the huge potential of small and micro businesses, its CEO said today.
The lender is aiming to become a one-stop financial services bank and wants to expand into sharia banking, multifinance and insurance, BJBR CEO Bien Subiantoro said.
“The strategy is to become a majority (owner) in all 51 rural banks,” said Subiantoro, adding that BJBR already holds a minority stake in several rural banks it wants to buy.
“We're waiting for the central bank's approval as most of the rural banks are not in a financially good condition but we wanted to use the bank's network to expand our micro loan business.”
Rural banks are small and largely based outside cities, offering loans to micro and small businesses.
Indonesia had 1,665 rural banks as of March 2012 with 54 trillion rupiah (RM17.16 billion) in total assets, according to the central bank's latest data.
The central bank is working on regulations to cap ownership in banks at a maximum of 40 per cent per shareholder from 99 per cent currently, which could scupper new banking acquisitions.
Bank Indonesia has indicated it will exempt any banking acquisition if the target bank needs a bailout or restructuring.
BJBR traded flat at 870 rupiah a share today, or 1.7 times price to book value, with a $889 million market capitalisation, according to Thomson Reuters' Starmine.
BJBR was established in 1961 when the government nationalised a Dutch bank. It has shifted its focus to small and micro-businesses. Prior to that it gave transactional and loan services to local governments in West Java and Banten. — Reuters