Bank Syariah Indonesia seeks to tap religious millennials to double assets

Bank Syariah Indonesia's President Director Hery Gunardi poses for pictures after an online interview with Reuters, at their headquarters in Jakarta, Indonesia, June 7, 2021. REUTERS/Willy Kurniawan

Bank Syariah Indonesia (BSI), the country’s biggest Islamic lender, plans to cater to a growing community of more religious millennials to help double its assets within three to four years, its chief executive told Reuters.

BSI was formed this year via a merger between the Islamic banking units of state-controlled Bank Rakyat Indonesia, Bank Mandiri and Bank Negara Indonesia, making it Indonesia’s seventh-biggest bank.

The lender plans to double its 240 trillion rupiah ($16.84 billion) of assets in the next few years to become the No. 5 lender, while targeting the highest return on equity among local banks by 2025, Chief Executive Hery Gunardi said in an interview.

Indonesia has the world’s biggest Muslim population of more than 230 million, but its Islamic banking is dwarfed by conventional finance, something Hery blamed on a lack of understanding and a smaller pool of capital.

BSI plans to address this by targeting a community of more pious, middle class millennials.

The strategy includes developing a better online banking experience connected to popular e-wallets and e-commerce platforms, which also has religious features, he said.

“BSI Mobile provides … features such as a function to find mosques, a prayer time reminder, and there is a ‘ziswaf’ feature, the zakat, infaq, and waqf,” Hery said, referring to Islamic alms giving and endowment, adding that such payments amounted to over 100 trillion rupiah a year.

BSI also plans to strengthen wholesale banking, an area where traditionally Indonesian Islamic banks have shied away from due to weak capital backing, Hery said.

BSI is considering opening a branch in Dubai this year to serve Indonesian companies that want to market Islamic bonds to Middle East investors, Hery said.

However, for now, BSI is focusing on integrating banking systems and branches from three different lenders to serve its 15 million customers, a process Hery expects to be completed by the end of November.

He also said BSI aims to lift its financing by 6% to 8% this year and savings by 10%, while keeping its non-performing financing ratio at around 2.5% to 2.85% and capital adequacy ratio at 18% to 19%.

Reuters

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.