BRI Syariah set to become Indonesia’s biggest Islamic bank after 3-way merger

Jakarta, Indonesia. Photo by Tom Fisk on Pexels.

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.

Reuters

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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).

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  • 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. 
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