In a move leading to consolidation in state-owned financial services space, Indonesian lender Bank Rakyat Indonesia (BBRI) will acquire investment holding firm PT Bahana Usaha Pembinaan Indonesia (BPUI) from the government, while Bank Negara Indonesia (BBNI) will bring investment holding company Danareksa (Persero) under its fold, a senior official told DEALSTREETASIA.
The is part of State Own Enterprises (SOEs) Ministry initiative to restructure the financial institutions to derive efficiency and scale benefits. Currently the government fully owns both companies.
“The government will hold 100 per cent in the new holding firm, which will help banks to raise funds to finance their business expansion,” Gatot Trihargo, the deputy for SOEs Minister said.
This year, the ministry is targeting to set up six new holding companies (holdco) in sectors including financial services, energy, mining, toll road, real estate, construction and engineering. Danareksa will become the holding company for financial companies such as BBRI, BBNI, PT Bank Mandiri Tbk (BMRI), PT Bank Tabungan Negara Tbk (BBTN), pawnshop firm Perum Pegadaian and venture capital firm PT Perusahaan Nasional Madani.
Bahana Group is into investment banking, securities trading and brokerage PT Bahana Securities; venture capital PT Bahana Artha Ventura, asset management PT Bahana TCW Management and office building management PT Graha Niaga Tata Utama.
Danareksa, a pioneering Indonesian financial institution, was the first to introduce mutual funds in Indonesia. It was also the first to launch a US Dollar-denominated fixed-income fund and promote syariah-based investments.
It operates investment banking through PT Danareksa Sekuritas, investment management via PT Danareksa Investment Management, structured product and finance PT Danareksa Finance and private equity and fund creation through PT Danareksa Capital.
In four years, the ministry will set up holding companies in sectors such as mining, shariah bank, general insurance, reinsurance, venture capital, ship yard, port fishery, Information & technology, air services and electronics.
“We will form a holding company to make SOEs more agile, stronger and bigger. We expect the holding company would increase efficiency and provide better leverage for the companies to increase external funding in a bid to support the government’s massive infrastructure projects,” SOEs minister Rini Soemarno earlier told reporters.
SOEs Ministry will resizing number of companies from 119 to 85 by 2019 through merger, acquisition and setting up new holding companies, said the minister.
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