Shariah Banks' Merger and Acquisition Season on the Horizon

By Editorial Team 01/03/2024
Merger and Acquisition
Summary

The Financial Services Authority (OJK) has unveiled that Indonesia's Islamic banking industry is set to welcome a significant new entity. Dian Ediana Rae, the Executive Head of Banking Supervision at OJK, revealed that several banks are planning mergers and are currently in preliminary discussions. She noted that private banks will lead the mergers involving these Islamic banks.

"This is part of the implementation of OJK regulations regarding the spin-off of Islamic banking," Dian said on Feb 29. She explained that the new entity of Islamic banks will merge three to four companies with a total asset value of Rp 200 trillion.

In a separate development, Rizky Budinanda, the Investor Relations Group Head of Bank Syariah Indonesia (BSI), stated that BSI is open to consolidation due to the company's strong capital. "BSI can acquire good assets at reasonable prices," he said. According to Rizky, if small Islamic banks plan to sell their assets, BSI will welcome such opportunities if the valuation is attractive.

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