Monday , October 3 2022

There are rumors that BNI will buy a bank, how strong is BNI’s capital?



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Jakarta, CNBC Indonesia State-owned banking rumors KBMI (Capital Bank Core Group) 4, Ngara Indonesia Bank (Presero) Tbk Bank (BBNI), according to rumors, will continue its corporate operations at the end of the year.

One of the rumors coming up in the near future is that BBNI is planning to acquire a bank.

In the past, BBNI management has stated that they are willing to target banks that are still in BUKU (Commercial Banks Business Group) I or II before the Financial Services Authority (OJK) Regulation regarding bank classification has been changed to KBMI.

The said acquisition, according to rumors, will also cooperate Fintech Company So one can guess that the direction of BNI could be to set up a digital banking business.

Using POJK numbers 12 and 13 of 2021, OJK has provided a clear legal umbrella for the banking industry.

OJK encourages banks to continue to strengthen their capital. As a result of the new regulation, banks are required to have a minimum capital of Rp 2 trillion this year, and Rp 3 trillion by next year, otherwise they will be demoted.

To date, there are still a number of banks with limited capital that must comply with these provisions. If a BBNI plan is implemented, it is clear that banks in this category will be the targets of the acquisition targets.

Capital

BNI’s capital is now in a relatively solid position compared to the end of last year. BBNI’s capital adequacy ratio until semester I 2021 is still maintained with a CAR (capital adequacy ratio) of 18% above the minimum requirement of 12%.

This means that buying a bank at a cost of 2 to 3 trillion Rp should not be something that BBNI should worry about.

Along with the strengthening of capital carried out by BBNI through the issuance of global bonds this year.

Trends in strengthening the exchange rate of the rupee and appetite Investors have become a positive catalyst for BBNI’s global bond issuance.

In March 2021, BBNI issued global bonds, in which investors rose to $ 2.2 billion or the equivalent of 31.2 trillion rupees, assuming an exchange rate of 14,200 rupees / US dollars. Although the target is only Rp.7 trillion. This means that BBNI’s global bonds have arrived Over-registered Up to 4.4x.

And in September 2021, in 2021, BBNI issued an additional $ 600 million capital bond or around Rs 8.6 trillion (assuming an exchange rate of $ 14,299 per dollar).

Securities issued at an interest rate of 4.3% per annum are the first to be issued by a bank in Indonesia.

Company appearance

On the other hand, BBNI’s financial performance also showed improvement. Based on the Company’s Interim Financial Statement in June 2021, BBNI’s net profit increased by 12.8% year-on-year (YU) to Rs 5.03 trillion.

The increase in net profit was due to an increase in interest and non-interest income of more than 15% per year. The combined low cost funds of the United BBNI (CASA, current account savings account) also increased double digits to 11.5% yo, in line with deposits falling by 8.7% per annum.

The upward trend in CASA against the background of a decrease in deposits has reduced the cost of funds (Cost of Fund / CoF) issued by BBNI to a decrease of 1.2 percentage points. This caused the company’s net profit to rise by 0.4 percentage points.

Looking at the quality of its assets, there is indeed an increase in the ratio of non-performing loans (NPL) to the first semester of the year. However, BBNI’s loan-to-risk ratio recorded a decline of 2.2 percentage points.

With sufficient reserves and an NPL coverage ratio of up to 215%, NPL still tends to be manageable.

In terms of assets, BBNI’s loans also recorded positive growth. BBNI’s credit distribution up to the first half of the year increased by 4.5% relative to credit growth in the banking industry, which tends to shrink by June 2021.

The existence of a plan to acquire a bank, efforts to strengthen capital with carefully calculated risks and a significant improvement in financial performance have become positive catalysts for BBNI’s share price.

Indonesia Research Team CNBC

[Gambas:Video CNBC]

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