Bank Rakyat Indonesia Seeks Mid-Sized Lender for Micro-Loan Expansion
December 02 2010
By : Francezka Nangoy; Jakarta Globe
Jakarta. Bank Rakyat Indonesia, the country’s second-largest lender by market value, is looking to purchase a mid-size bank to boost its reach in the microfinance business, a company executive said on Friday.
“Bank Rakyat Indonesia now wants to acquire a bank which has the same vision,’’ said Muhammad Ali, the lender’s corporate secretary.
“Bank Rakyat’s policy is to buy a majority stake. That way, we can be fully committed to developing the bank into a better lender,’’ he said.
Ali declined to name any of the smaller banks BRI was considering for acquisition, nor did he give a timeline for the deal.
The Jakarta-based bank has lent Rp 188.9 trillion ($20.96 billion) to small- and medium-sized businesses in Indonesia this year through September.
The announcement comes just two days after the bank bought a majority stake in another lender. On Wednesday, shareholders approved a Rp 330.3 billion plan to purchase an 88.65 percent stake in Bank Agroniaga.
BRI’s acquisition of Bank Agroniaga was aimed at increasing its exposure to the agribusiness sector, Ali said.
In 2007, the lender bought a majority stake in Bank Jasa Arta, and in 2008 spun off Bank Jasa as a stand-alone Islamic bank, adhering to the interest-averse principles of Shariah lending.
Net profit at BRI rose to Rp 6.66 trillion in the first nine months of this year from Rp 5.3 trillion over the same period in 2009. Its total assets rose 18.1 percent to Rp 325.95 trillion in the first nine months of this year from Rp 276 trillion last year.
BRI’s share price fell 35 percent on Friday to Rp 11,100 on the Indonesia Stock Exhange (IDX).