State-owned Indonesian banks create common ATM network, look to acquire switching co

Photo by Vincencia NLS

Four Indonesia state owned bank have formed an Association of State-Owned Banks (HIMBARA) merging their automatic teller machine called (ATM) network, in a move to create or acquire one switching company.

The consolidation, is expected to help cut operational costs of the banks by up to Rp6.8 trillion ($489.21 million) per year. The move is also expected to enhance their competitiveness and efficiency ahead of the ASEAN Economic Community (AEC).

After the merged ATM link, next step, the HIMBARA is looking forward to is creating of its own switching company. The banks, are expecting that the new switching company will be established in first quarter of 2016.

For now, the partnership will allow customers of the four banks to use the ATMs of all the banks without incurring additional charges. The four state banks are PT Bank Rakyat Indonesia Tbk (BBR), PT Bank Mandiri Tbk (BMRI), PT Bank Negara Indonesia Tbk (BBNI) and PT Bank Tabungan Negara Tbk (BBTN) .

State-owned Enterprises Minister Rini Soemarno explained said that the synergies are a part of the ministry’s plan to create a virtual holding between the state banks. “The efficiency, created through the synergy, will be their strength for succeeding in the AEC competition,” she said after the “Link ATM Himbara” launching ceremony in Jakarta.

Meanwhile, HIMBARA chair Asmawi Syam adding, in the first phase there will be 50 Himbara ATMs in Greater Jakarta. Then, are eyeing 800 consolidated ATMs in 2016 displaying HIMBARA’s logo across the country, said Asmawi, who is also BBRI’s CEO.

Chair of the Financial Services Authority (OJK) board of commissioners Muliaman D. Hadad said the synergy was very important since the state-owned banks accounted for 50 per cent of the assets in the banking industry. He expect, National Bank Association (Perbanas) also to follow the HIMBARA programs.

CEO of Bank Mandiri Budi Gunadi Sadikin added, that the new system will cut ATM operational costs for the banks, investment, as well as reduce customers’ transaction cost up to 75 per cent –mean hundred billions rupiah—starting next year.

According to Budi, the switching company could build by the four banks or through acquisition.

“Next step will create switching company, so that later on all the bank transactions do not have to use Visa or Mastercard. We will make as like China Union Pay, ” he said

Till December, the state banks own 55.804 ATMs across the nation.

Also Read: 

Indonesia state banks’ consortium in talks to buy listed mobile operator Telkom’s ATM service arm

Indonesia: Mandiri Capital in JV with S Korea’s BC Card for electronic data capture ops

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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. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.