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Digital Bank Agenda: Continuous Furtherance?

A substantial total of 63.92% shares of PT Bank Mayora are set to be acquired by PT Bank Negara Indonesia (Persero) Tbk (BBNI). The company intends to expand its orbit by establishing a digital bank - following market inclination trend. This settlement is set to be finalized as early as May 2022, subsequent to its precursory announcement in January and the general meeting of the shareholders' agreement in March 2022. BNI has also considered selling shares in Bank Mayora to Sea Limited to support the technicalities of transforming it into a digital bank, based on their previous experience with Sea Bank. If this prospective materializes, BNI is committed to being diluted approximately 10% of its ownership in Bank Mayora. Negotiations with the tech partners have reached the stage of setting up a business model and designing the IT infrastructure based on previous models that has worked well in Indonesia, conveyed Royke Tumilaar, President Director of BNI, on BNI’s first quarter of 2022 public expose, Tuesday (4/26). Furthermore, Royke Tumilaar states that agreements with tech partners have been initiated because he wants to support Bank Mayora to develop into a digital bank that can support MSMEs with a domestic share of the market. Since most digital banks mainly focus on consumers, BNI will focus on MSMEs through its MSME Go Global program to strengthen a broad range of industries.

With the ever-changing state of market affairs, it’s impossible for BNI not to collate and contrast its position with its in-group competitors. For instance, the giant public bank has surpassed PT Bank Jago Tbk (ARTO), which has a market capitalization of Rp170 trillion. On Tuesday (4/26), Indonesia Stock Exchange (IDX) stated that BBNI’s market cap had reached Rp177 trillion. The company ranked ninth in terms of market capitalization on the IDX as its unit price per share continues to rise and was last reported to be around Rp9,500 per share with a substantial gain of up to 40% year-to-date. This was followed by the President Director of BNI, Royke Tumilaar, who proclaimed that the company’s profit in the first quarter of 2022 had managed to reach Rp3.96 trillion with a significant growth of 63.2% year-on-year (YoY). According to Forbes’ research on World’s Best Banks 2022, Jago and BNI are listed as the top 20 banks in Indonesia. Bank Jago is still three ranks above BNI, which ranked 10th on the list. Despite that, BNI has the potential to surpass Bank Jago due to positive performance indicators such as asset quality, liquidity, and efficiency, all of which are improving. It is also supported by a better credit distribution plan in all segments and a more favorable macroeconomic trend. “The decline of the Omicron Virus spread stimulated the economy to continue encouraging the improvement of BNI’s asset quality,” conveyed Royke Tumilaar on BNI’s first quarter of 2022 public expose, as well as BNI’s plan to launch its digital banking services in collaboration with Sea Bank.

The Digital Banking sector has skyrocketed with its excellent performance leading to profit rising drastically, proved by most banks having already expanded and shifted all their focus towards digital banking, for instance Blu by PT Bank Digital BCA, Livin by PT Bank Mandiri Tbk, and Jenius by PT Bank Tabungan Pensiunan Nasional Tbk (BTPN). Bank Indonesia has recognized the digital economy and the financial transactions demonstrated together with the expanding public acceptance and preference in E-Commerce, expansion and advancement of digital payment systems, and acceleration of digital banking. On Tuesday (4/19), Bank Indonesia Governor Perry Warjiyo stated that the value of digital banking acquisitions in the first quartile of 2022 has increased by 34.9% year-on-year. Furthermore, it is forecasted to grow by 26.7% year-on-year to Rp51.73 trillion. On the digital transaction side, the value of e-money transactions increased by 42% in the first quartile of 2022 and is expected to increase by 18% to Rp360 trillion for the entire year 2022. This state is profoundly affected by the adaptability and efficiency of opening an account, all done digitally through self-service authorization and other applicable features. In light of these rapid build outs, the digital bank agenda will essentially continue to advance at a quick pace - leaving the door open for new contenders to enter the competition.


CNBC Indonesia



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