SIMULATION : BANK MEGA ACQUIRED 51 % SHARE OF BANK BUKOPIN

BANK MEGA

Bank Mega is owned by Indonesian tycoon Mr. Chairul Tanjung through his corporation in CT Corporation. CT Corp owns more than 99 % total share of Mega Corpora which is as the major share holder of Bank Mega. Based on annual report of 2014, more than 86 % of total net profit is contributed by wholesale Banking and retail Banking. The Bank was founded in 1969; its name was Bank Karman that has a head quarter in Surabaya. In 1992 Bank Karman changed its name became Mega Bank.

In 1996 PARA group acquired Mega Bank, later in 2000 Mega Bank changed its name became Bank Mega.

Mr. Chairul Tanjung, the big boss of CT corp, fulfills position of President Commissioner in Bank Mega. Mr. Chairul Tanjung is one of successful man after the monetary crisis in 1998. He made synergy of Bank Mega and other corporation under CT Corporation such as Carrefour, Metro Department store, Transformation TV and CT Global Resources, the part of CT Corporation which is operating in natural resources.

BANK BUKOPIN

Bank Bukopin is owned by Kopelindo, Government of Indonesia, Bosowa Corporation and public. Company’s core of business is at UKMK Segment, Small medium enterprise and cooperative. The biggest contribution of net profit is from UKMK segment. In 2014 its segment of UKMK was growing more than 10 % up compared to 2013. Several segment of micro credit were expanding include credit of pension, meanwhile for UKMK segment credit for food endurance and energy achieved a positive growth.

Starting from a cooperative in 1970, BUKOPIN has been growing in step with economic growth of Indonesia in to a large company. In 2006 Bank Bukopin has listed in Jakarta stock exchange and it has acquired Bank Syariah Bukopin and Bukopin Finance. Bukopin has synergy with government institution and state owned company in financing its partner of SME and cooperative partner. 

BANK UMUM KOPERASI INDONESIA

Bank Bukopin has core of business as creditor for micro business and cooperative and also small medium enterprise. The majority of the clients are cooperatives in government institutional and state owned company in Indonesia. BUKOPIN was established in 1970, the company was a cooperative in that year, and then in 1993 the company had just changed from a cooperative in to a private company or a limited company. The company had listed in Jakarta stock exchange in 2006 and in the same year the company acquired PT Bank Persyarikatan Indonesia and Indotrans Buana Multifinance. After acquisition Bank persyarikatan Indonesia and indotrans buana multifinance changed the name as Bank Syariah Bukopin and Bukopin finance respectively.

In consumer segment the company was able to extend its credit in almost of all products in 2014 such as credit card, car financing, home financing, back to back loan and etc.

In 2014 the company increased its credit for pension from IDR 1.7 billion in 2013 up to 3.3 billion or advanced more than 100 % compared to loan  in 2013. Other loans for micro segment commonly decreased as a slowdown in economic growth in 2014. the decreased segment were credit for heavy equipment, KUR, Small medium enterprise partnership, credit for sugar financing and etc. in spite of those loan decreased the overall gross loans in 2014 had increased 14.6 % up.

Meanwhile in funding side, the company could increase its fund from customer in 2014 more than 17% compared to 2013. It collected more fund from the client with more expensive interest cost due to the rise of BI rate in 2014. Customer tends to save fund once the bank offers attractive interest rate of deposit product. I step with funding side; the interest rate of its loan product was also rose. The average loan to interest income ration in 2014 climbed from 12.5 % in 2013 up to 13.9 %.

Based on annual report in 2014, the shareholders consist of Kopelindo ( 25.66%), Government (11.44%),Bosowa ( 22.43%) and  public ( 40.49%). 

Simulation: consolidation is expected to perform as best payment bank in ASEAN with more diversified loan portfolio

If Bank Mandiri acquired BRI the acquisition may result a company that has synergy of micro and retail banking and wholesale banking. The company will be more diversified in its loan portfolio. Bank Mandiri is more concern in urban area and BRI that tend to focus in outlying place, the composite of two different characters in segment and geographical operation area. The fusion of both will perform better payment bank that could serve the customer in village, urban and even oversea especially for ASEAN’s Region. Bank Mandiri has several branches in overseas and so does with BRI, the combination of both may improve the payment service for customer.

Bank Mandiri

Bank Mandiri is the biggest banking in Indonesia; the company was appeared from mega merger of 4 banks in 1998. There were 4 large banks that formed the company, they were Bank Dagang Negara, Bank Bumi Daya, Bank Pembangunan Indonesia and Bank exim.  Mr. Robby Johan who was leading the merger process in 1998 and he was also appointed as the first CEO of the bank. Then Mr. Agus Martowardoyo, his former subordinate was his successor. The core of business of the company is wholesale banking that consists of commercial banking, corporate banking and also institutional banking. Bank Mandiri is a state owned company; government of Indonesia owns more than 60 % of total share. In 2014 the asset of the company was more than IDR 855 trillion rupiah. In 2020 the company intends to be best banking company in ASEAN. 

Bank BRI

The company has impressed historical milestone since it was established before Indonesia declared its independent day in 1945. It was founded by Ariawiriatmaja in 1895, its name was De poerwokertoschehulp en spaarbank der inlandsche hoofdenin purwokerto. The entity was managing a mosque-fund include disbursed fund to people        in a simple way. During the Japanese occupation the company was changed its name became Syomin Ginko. The company named its name as BRI in 1946 after Indonesia declared its independence. From mosque fund manager in to a largest micro and retail bank in Indonesia, no one was predicted that the small entity that was owned by ariawiriatmadja became a great banking company. In 2014 BRI was purchasing satellite to strengthen its e-banking across Indonesia. Among of its clients is located in outlying area. In 2014 the total asset of the company was more than IDR 801 trillion. BRI is a state owned banking company; Government of Indonesia has 56.75 % of its total share.

BMRI 2015

More focus in Micro and retail banking

Background

Bank mandiri is a state owned bank in Indonesia that has been a biggest banking at Indonesia since monetary crisis of 1998. There were more than ten banks which were merged become one giant bank. They consisted of bank  bumi daya, bank bali,bank dagang Negara and etc. 

Mandiri has many subsidiaries such as mandiri tunas finance, bank sinar harapan bali,Bank Syariah mandiri, mandiri securities, Asuransi jiwa in health, Mandiri axa general insurance, Bank mandiri Europe limited,mandiri international remittance sendirian berhad and etc. They generally has linked synergy with others state owned company such as Pos Indonesia, BPJS and etc.

Bank mandiri was recognized as a banking company which concerned in giving loan for corporate segment, now, the company seemed to change its strategy to capture higher margin. The biggest revenue in 2014 of the company was contributed by micro & retail banking segment. There was over than 30 trillion rupiah of interest income from the sector.

Based on its annual report the company put three core of strategy to advance micro and retail segment, it consist of wholesale transaction, retail payment and retail financing.

Bank Mandiri is a state owned company that is owned by the government of Indonesia (60%) and public (40%). The company is under command of ministry of BUMN, all decisions and strategies are directed by ministry of BUMN. If Bank Mandiri is likely transformed in to retail banking, it will compete with another bank that is owned by government, BRI. The micro and retail segments are ruled by BRI, it has been the market leader for the segment in last decades.

In 2014 the interest income of the company was 62,637,942 million rupiah which was 24 % higher than interest income of 2013. The net interest margin dropped as the interest rate of central bank was relatively high; the bank has to provide higher interest rate for its customer of deposit. As the result of that, the ratio of interest income to net loan in 2014 was 15.2 % which was higher than same ratio in 2013 that was at 13.7 %.

The biggest contributor of interest income in 2014 was achieved by micro and retail segment that was amounted to IDR 20,653,671 million. The corporate segment was only able to generate interest income amounted to IDR 12,018,419 million. In the same year company’s loan to deposit ratio was 79.4 % (Net loan / Deposit ratio) that was likely lower than LDR in 2013 which was 81%. The company may expand more credit in 2014.