for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Company News

BRI Syariah to be Indonesia's biggest Islamic bank after 3-way merger

JAKARTA, Oct 14 (Reuters) - State-owned BRI Syariah is set to become Indonesia’s biggest Islamic lender after announcing a three-way bank merger that sent its shares soaring 25% for the second straight day.

The unit of state lender Bank Rakyat Indonesia signed a conditional merger deal with state-owned rivals BNI Syariah and Bank Syariah Mandiri, according to BRI Syariah’s stock exchange filing on Tuesday.

The move could be a precursor to more bank mergers in Southeast Asia’s biggest economy where smaller lenders have been hit hard by the coronavirus pandemic, some analysts said.

BNI Syariah and Bank Syariah Mandiri are unlisted units of state-owned Bank Negara Indonesia and Bank Mandiri , respectively.

The planned merger would improve BRI Syariah’s lending capacity as the combined assets of the three banks would reach 207 trillion rupiah ($14.08 billion) when the process concluded in 2021, the ministry of state-owned enterprises said in a statement late on Tuesday.

After the merger, BRI Syariah would be the biggest Islamic lender in the country with the world’s largest Muslim population, the ministry said.

The Financial Services Authority (OJK) said in a separate statement it would facilitate the merger.

Muhammad Alfatih, an analyst with brokerage Samuel Sekuritas, said more banking consolidation could be expected.

“Private banks are perhaps eyed by foreign investors. It’s very possible that (investors) buy two or three banks and merge them, as there could be a couple of banks facing trouble that could be saved by merger,” he said. ($1 = 14,700.0000 rupiah) (Reporting by Tabita Diela and Maikel Jefriando; Editing by Gayatri Suroyo and Muralikumar Anantharaman)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up