Indonesian giant gets majority in largest Islamic bank

By Iqbal Musyaffa

JAKARTA, Indonesia (AA) - Financial giant Bank Mandiri will be the majority shareholder of Indonesia’s upcoming largest Islamic bank, it was disclosed on Wednesday.

Bank Mandiri holds 51.2% shares of the new bank, which is being formed by merging Islamic banking subsidiaries of three state-owned banks.

Other shareholders are Bank Negara Indonesia with 25%, Bank Rakyat Indonesia with 17.4%, BRI Sharia Financial Institution Pension Fund with 2%, and the public with 4.4%.

Hery Gunardi, Bank Mandiri’s deputy president director who is heading the merger team, said the shareholding structure was based on valuation calculations of each bank part of the merged entity.

The merged bank will have strong capital and assets in terms of finance, human resources, and information technology systems, as well as financial products and services to meet customer needs in accordance with Sharia [Islamic law] principles, he said in a statement.

Total assets of the merged bank will be 214.6 trillion Indonesian rupiah ($14.6 billion), with a core capital of more than 20.4 trillion Indonesian rupiah ($1.3 billion), read the statement.

“Therefore, the merged bank will enter Indonesia’s top 10 largest banks in terms of assets and the world’s top 10 largest Islamic banks in terms of market capitalization,” said Gunardi.

He said the bank will remain a public company and be listed on the Indonesia Stock Exchange.

“This integration is more than just a corporate action. Guarding and raising the largest Islamic bank in this country is actually a big mandate,” he said.

The merged Islamic bank will have more than 1,200 branches, 1,700 ATMs, and 20,000 employees across Indonesia.

The effective date of the merger is Feb. 1, 2021, according to the merger plan summary.

* Writing by Rhany Chairunissa Rufinaldo from Anadolu Agency's Indonesian language services in Jakarta