Indonesia’s biggest lender BRI said to be planning $1b rights issue

Photo by Bank Rakyat Indonesia

PT Bank Rakyat Indonesia, the country’s largest lender by assets, is exploring a plan to raise at least $1 billion through a rights issue, according to people with knowledge of the matter.The state-owned bank is working with advisers on the potential fundraising, which could take place as soon as the first half of this year, said one of the people, who asked not to be identified as the information is private. The lender plans to strengthen its capital base to prepare for potential acquisitions with the proceeds, the people said.

Deliberations are ongoing and Bank Rakyat could still adjust the fundraising structure or even decide not to proceed, the people said. A representative for Bank Rakyat declined to comment on the fundraising plan, adding the bank’s focus is to maintain and improve performance and to play an active role in the national economy recovery program.

The planned fundraising comes after the lender in October signed a conditional deal with PT Bank Mandiri and PT Bank Negara Indonesia to combine their Shariah-compliant units that could form an entity whose assets could reach 390 trillion rupiah ($28 billion) by 2025. Indonesia, home to the world’s largest Muslim population, has sought to form a mega Islamic bank since at least 2015, taking on an earlier plan shelved by Malaysia.

Separately, the Indonesian government is keen for Bank Rakyat to work with state-owned pawnshop chain PT Pegadaian and financing firm PT Permodalan Nasional Madani to provide affordable financing for small and medium enterprises, Erick Thohir, the nation’s minister of state-owned enterprises, told local media last month. He didn’t provide further details on the plan.

Bank Rakyat was established in 1895 in Purwokerto, Central Java, according to its website. The country’s oldest lender used to be fully owned by the government until its listing in Jakarta in 2003. The bank has assets totaling 1,448 trillion rupiah as of Sept. 30, according to data compiled by Bloomberg.

Shares of Bank Rakyat have fallen about 2.5% in the past year, giving the lender a market value of around $38 billion.

Bloomberg

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.