BNI in Mayora take-over, taps into Indonesian digital banking growth

Indonesia’s state-owned Bank Negara Indonesia (BNI) is to acquire Bank Mayora, a report from Deal Street Asia has revealed.

BNI will acquire a 63.92% in Bank Mayora, a small-sized domestic lender owned by local conglomerate Mayora Group and the World Bank’s International Finance Corporation (IFC).

The deal is awaiting agreement from both banks’ general meeting of shareholders and is reported to take effect in May this year. BNI will acquire 1.03 billion new shares and more than 169 million shares owned by the IFC. The IFC had injected funds into Bank Mayora in 2015 and has assisted it in business development and good corporate governance.

The acquisition is part of BNI’s efforts to enter the digital banking space. The bank’s management said in a statement, “BNI will form a digital lender through inorganic strategy by taking over Bank Mayora which will be transformed into a digital bank.”

The transaction will be financed using BNI’s retained earnings, not via any lending, the company said. Following completion of the transaction, 63.92% of the share of Bank Mayora will be owned by BNI and the remaining 36.08% owned by PT Mayora Inti Utama.

The acquisition comes at a time of significant global uptake of digital banking, which is only expected to grow. A study by Juniper research predicted that 53% of the population will access digital banking services in 2026.

Indonesia’s digital banking sector in particular has seen rapid growth and significant investment. Earlier this month, UpBanx, a FinTech platform designed to help content creators and freelancers manage their money and digital assets, raised $5.2m in a pre-seed funding round.

Akulaku, which provides digital banking services, was reported to be considering a merger with special purpose acquisition company (SPAC) Catcha Investment Corp. The company expected annual revenue of $619m and gross merchandise value of about $5bn in 2021, according to an internal document from October seen by Bloomberg News.

In 2021, Indonesia’s Financial Services Authority (OJK) introduced a regulatory framework for digital banks in its updated commercial banking regulations, which were aimed at accelerating digital transformation in the banking sector in the region.

The regulations allow digital banks to be able to operate with only one physical office as its head office. The OJK established six requirements for digital banks. These include having a business model that uses innovative and safe technology to serve customer needs, having the ability to manage a prudent and sustainable digital banking business model and having adequate risk management.

OJK executive head of banking supervision Heru Kristiyana said, “The pandemic has pushed digital transformation in the banking sector into a necessity. Such conditions require banks to place digital transformation as a priority and as one of the strategies in efforts to increase bank competitiveness.”

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