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Friday 6 February 2015

Indonesia weighs merging Islamic banking units, but 2 banks say no plan yet

Indonesia's state enterprises ministry and financial regulator are talking about potentially merging the Islamic units of three state-controlled banks, but two of them said they have no plans for any such merger yet.
Local media previously reported that PT Bank Mandiri Tbk , PT Bank Rakyat IndonesiaTbk and PT Bank Negara Indonesia Tbk (BNI) may merge their Islamic banking businesses.
"That is just an initial thought that is developing between the state-owned enterprises minister and the regulator," Nelson Tampubolon, the executive head of banking supervision at the Indonesian financial services authority, told Reuters in a text message on Wednesday.
"It has to be further assessed because it has to involve the parents of each sharia bank," he said, adding that he cannot forecast when such a merger may take place.
Authorities in Indonesia want to reshape the country's Islamic finance industry by encouraging consolidation and building a new regulatory system, as the sector seeks to catch up with more mature markets in Malaysia and the Middle East.
Mandiri Corporate Secretary Rohan Hafas said it has no plans yet to merge its Islamic finance unit with others, while CEO Budi Gunadi Sadikin separately said that it is currently focusing on a rights issue.
BNI also has no plans for such a merger, Corporate Secretary Tribuana Tunggadewi said.

"Fundamentally it is up to the shareholders, but there must be some certainty on the purpose of this merger," said Imam Teguh Saptono, a business director at BNI Syariah, the Islamic unit of BNI.
(Reuters / 04 Febuary 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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