Bank Rakyat Indonesia Syariah plans March IPO

Photo: A woman walks past a Bank Rakyat Indonesia (BRI) automated teller machine (ATM) in Jakarta December 4, 2009. State-owned BRI is the parent bank of BRI Syariah. REUTERS/Crack Palinggi

JAKARTA – Indonesia’s Bank Rakyat Indonesia Syariah, a subsidiary of state-owned listed lender PT Bank Rakyat Indonesia (BRI), is planning an initial public offering (IPO) of its shares on the Indonesia Stock Exchange in March, Haru Koesmahargyo, its Financial and Business Strategy Director told Salaam Gateway.

BRI’s board of directors has given the nod for the company to sell as much as 30 percent of its shares to the public in a deal that could raise the bank around 2.5 trillion Indonesian rupiah ($188 million), said Koesmahargyo.

“We want to become the first Islamic bank to be listed on the Indonesia Stock Exchange. Panin Syariah was listed in January 2014 but that was conducted via a private placement by strategic investor Dubai Islamic Bank that owned 39 percent of their share,” said Koesmahargyo.

“We want to be the first Islamic bank to offer our shares fully to the public. We might reduce our shares from majority 91 percent to only 66 percent after the IPO,” he added.

Koesmahargyo said the IPO will boost BRI Syariah’s classification to Bank BUKU III (Tier III), which is the category for banks with minimum core capital of 5 trillion Indonesian rupiah. Currently Bank Syariah Mandiri is the only Islamic bank in this category. The remaining 11 Islamic banks, including BRI Syariah, are still in the lower Tier II and I categories. 

At the third quarter of 2017, BRI Syariah held 2.5 trillion rupiah core capital and assets of 30.4 trillion rupiah. It is Indonesia’s third biggest Islamic bank by assets, after Bank Syariah Mandiri that holds around 84 trillion rupiah and Bank Muamalat that has assets of around 56 trillion rupiah.

BRI Syariah first announced its 2018 IPO target in October 2016.

($1 = 13,275 Indonesian rupiah)

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])

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