Jakarta, CNBC Indonesia – The Financial Services Authority (OJK) has set a rule that commercial banks are required to have a core capital of at least Rp 1 trillion last year and this has been fulfilled. Meanwhile, for this year the core capital is required to be at least Rp 2 trillion and next year Rp 3 trillion as of December 2022.
This corresponds to deadline stipulated in OJK Regulation (POJK) Number 12/POJK.03/2020 concerning Commercial Bank Consolidation.
Therefore, 2021 is only a matter of months, considering that this Wednesday, September 1 has entered, there are only 3 months left for mini-capital banks that are required to increase their core capital, which is less than this provision.
The capital increase can be through consolidation in the form of a strategic investor (private placement) to additional capital through the issuance of new shares with Pre-emptive Rights (HMTED) or rights issue.
If the minimum core capital cannot be achieved by a mini bank, then the bank has the potential to be degraded by the OJK into a Rural Bank (BPR), which of course has more limited business compared to conventional banking.
The activities of BPRs are much narrower than those of commercial banks because BPRs are prohibited from accepting demand deposits, foreign exchange activities, and insurance.
According to an official statement from OJK, this POJK was issued as part of efforts to strengthen the structure, resilience and competitiveness of the banking industry so as to support national economic stability and growth, as well as an effort to encourage the banking industry to reach a more efficient level towards higher economies of scale.
The following are mini banks with a core capital of less than Rp 2 trillion that are subject to additional capital requirements, and whose shares are listed on the Indonesia Stock Exchange (IDX).
The impact of this policy, if not implemented, will result in chaos in the capital market. This is because in terms of banking regulations, foreign investors are prohibited from being shareholders of BPRs.
This condition will trigger uncertainty about the fate of mini banking issuers when they are unable to meet their core capital and have to be demoted to BPR status, considering that currently foreign investors are free to buy any shares on the local exchange.
Article 23 of the Banking Law states that BPRs can only be established and owned by Indonesian citizens (WNI), BHI (Indonesian Legal Entities) whose owners are all Indonesian citizens, local governments, or can be jointly owned among the three.
Referring to the data above, one of the 13 mini-bank issuers is PT Allo Bank Indonesia Tbk (BBHI) which has a core capital of IDR 1 trillion after the corporate action. rights issue no longer need to comply with the POJK rules for banking consolidation.
This is because BBHI has just been registered as a Bank Business Group (KUB) of another bigger bank, namely PT Bank Mega Tbk (MEGA) which already has equity of up to Rp. 17 trillion, so BBHI is allowed by the regulator to only have a core capital of Rp. 1 trillion. and no need to add more capital.
Allo bank and Bank Mega are banks controlled by the CT Corp Group owned by national entrepreneur Chairul Tanjung.
While the remaining 12 banks still have to look for additional capital ranging from Rp 400 billion for PT Bank Ina Perdana Tbk (BINA) to Rp 1 trillion for PT Bank Amar Tbk (AMAR) until the end of 2021.
It is noted that several banks are in the final stages of their corporate action plans, such as PT Bank Capital Tbk (BACA) which is ready to carry out rights issue and raised fresh funds by issuing 20 billion new shares.
While the rest there are several other banks such as PT Bank Maspion Tbk (BMAS), PT Bank MNC Internasional Tbk (BABP), PT Bank Aladin Syariah Tbk (BANK), PPT Bank Nationalnobu Tbk (NOBU), PT Bank J Trust Indonesia Tbk (BCIC). and PT BPD Banten Tbk (BEKS) which is already planning to take corporate action rights issue this year.
CNBC INDONESIA RESEARCH TEAM
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