Jakarta, CNBC Indonesia – Red Plate banking issuers PT Bank Rakyat Indonesia Tbk (BBRI) is in the spotlight of market players. How could it not since last November 5, BBRI’s share price flew 21.58% to the closing price on Friday (13/11/20) yesterday at the level of Rp 4,000 / unit
In fact, it was revealed, in addition to the currently good global sentiment, namely the news of the corona vaccine from Pfizer which has an effectiveness of above 90%, Last Wednesday (11/11/2020) BBRI announced plans of major corporate action that will be carried out
It is not clear what corporate action will be carried out by BBRI, but of course investors can already sniff out this corporate action from long ago.
BBRI’s corporate action trail was left behind at the end of October which was the deadline for the collection of Q3 financial reports. BBRI announced that it would audit its financial statements so that the deadline for submitting audit results financial statements was extended.
A question mark certainly arises in the minds of market players because third quarter financial reports are not required to be audited, if a company audits financial statements, there will usually be massive corporate action.
Even the traces of BBRI’s corporate actions can be examined until early 2020. At that time, The Minister of BUMN, Erick Thohir, as the majority shareholder in BRI as the representative of the Government of Indonesia, has provided guidance on the direction of BRI’s future development.
This was conveyed by Erick when he was a speaker at the CNBC Indonesia Economic Outlook event in February 2020. Erick said the Ministry of BUMN would synergize BRI with Pegadaian and Permodalan Nasional Madani (PNM).
“We have a meeting with BRI, we want to make sure this June there will be an extraordinary synergy with Pegadaian (PT Pegadaian) and PMN(PT Permodalan Nasional Madani). So it is clear, there is no more overlapping policies there, and the target market is clear, if this happens, BRI will become an extraordinary bank. Buy the shares quickly! “Said Erick at that time.
It is not clear what kind of synergy Erick meant between the three SOEs, but what is clear is that the existence of ‘cooperation’ between the three companies will benefit all three, aka a symbiotic mutualism.
From the side of BBRI, the benefits come from support for BBRI’s future business direction, namely go smaller namely providing credit to the ultra micro segment. In this direction, BRI is targeting the portion of MSME financing to increase to 85%. from the previous position around 80%.
Segment ultra micro still unbankable or unreachable banking services BRI has not worked on this much so far. This segment consists of a share, including productive poor who are believed to have a very large market share, but only very few banks are playing in Indonesia.
Keep in mind that the number of people who have bank accounts per 2019 is only 49% and of course this number will continue to fall if it is divided again into low-income groups.
Segments that have been worked on by non-bank financing companies, such as BUMN Pegadaian and Permodalan Nasional Madani (PNM) so that with the synergy of the three companies, BBRI’s goal to penetrate the ultra-micro market will be easier to achieve.
In terms of PNM and Pegadaian, the benefits are of course in the form of funding and liquidity from BBRI-class banks which have the largest assets in Indonesia.
Previously, funding for the two companies could only be secured through the issuance of corporate bonds or loans to banks.
Just note that according to Refinitiv’s data, Pegadaian currently has the total Outstanding Bonds valued at IDR 10.8 trillion until 2025, of which more than half of IDR 5.8 trillion will mature next year.
Moreover, it turns out that this number continues to increase where the total value of the bonds that have matured previously for the last 22 years ‘is only’ IDR 13.42 trillion which shows that the need for Pegadaian funds is increasing from year to year.
The same thing happened to PNM where the company owns the total Outstanding Bonds which is even greater, namely Rp. 12.37 trillion until 2025, of which Rp. 4.1 trillion will mature next year.
The amount of PNM needs for fresh funds also continues to increase, as indicated by the total value of bonds maturing previously for the last 9 years ‘only’ Rp. 6.9 trillion
This is what certainly causes the cost of funds or commonly known as cost of funds the company swelled from year to year. It is recorded that the PNM interest cost in 2019 was Rp. 1.59 trillion, almost double from the previous year’s position of Rp. 0.99 trillion.
With the synergy between the three Red Plate companies, of course, Pegadaian and PNM will no longer need to look for fresh sources of funds and even if they want to issue bonds, bond interest rates can be reduced later because they have higher bargaining power so that cost of funds can be pressed.
So in the future the synergy between BBRI, Pegadaian, and PNM is predicted to truly benefit all parties. Isn’t that right Mr. Erick?
CNBC INDONESIA RESEARCH TEAM
(trp/trp)
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