<article>Publicly listed lender <a href="https://www.dealstreetasia.com/?s=BRI+Agro">BRI Agro</a> announced that it has set aside Rp 1 trillion ($70 million) to acquire two unnamed small banks as part of a strategy to accelerate its growth, Kontan reports.</article>

Publicly listed lender <a href="https://www.dealstreetasia.com/?s=BRI+Agro">BRI Agro</a> announced that it has set aside Rp 1 trillion ($70 million) to acquire two unnamed small banks as part of a strategy to accelerate its growth, Kontan reports.
“There are candidates that we are targeting. At the moment, we are racing against other banks. The target is buku I or buku II banks,” said BRI Agro executive director Agus Noorsanto in a public expose event on Wednesday.
Buku I and Buku II are two of four categories which banks in Indonesia are divided into according to their core capital. BUKU I is the lowest category and lists banks with core capital below Rp 1 trillion, followed by BUKU II with core capital between Rp 1 trillion and Rp 5 trillion.
Bank Agro itself is currently categorized as a Buku II bank with a core capital of Rp 3.1 trillion.
Agus confirmed that the bank’s parent company, state-owned lender <a href="https://www.dealstreetasia.com/?s=Bank+Rakyat+Indonesia">Bank Rakyat Indonesia</a> (BRI), has issued an instruction for the acquisition of two banks to be carried out.
However, he said that BRI Agro will acquire only one bank this year, with the other acquisition to take place next year.
BRI Agro is looking at investing almost Rp 600 billion for the first acquisition. The lenders involved are currently engaged in talks regarding the deal, and have yet to report to OJK about the planned move, Agus said.
Bank Agro will continue to focus on agribusiness sector as it expects its network and customer base to expand following the acquisition.
The bank raised the funds (Rp 1 trillion) for the acquisitions through a rights issue scheme, Agus added, from which the bank also managed to add around Rp 1.9 trillion to its core capital.
“With this addition in capital, our core capital will rise to Rp 5 trillion and we will be upgraded to Buku III,” he said.
Earlier this week, local lender Bank Agris announced that it&#8217;s majority stake will be acquired by Industrial Bank of Korea, which is also mulling an acquisition of another Indonesian bank before the end of this year.
Indonesian financial authorities are trying to trim the number of some 110 local banks and are open to mergers and acquisition of banks that enable consolidation in the sector.
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BRI Agro's parent company state-owned lender Bank Rakyat Indonesia (BRI) has issued an instruction for the acquisition of two banks to be carried out.

Indonesian lender BRI Agro sets aside $70m to acquire two smaller banks

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Indonesian lender BRI Agro sets aside $70m to acquire two smaller banks

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