State-owned lender Bank Negara Indonesia (BNI) will open a new branch in Saudi Arabia this year, according to president director Gatot Suwondo.
“We are currently conducting a feasibility study with the central bank of Saudi Arabia. We are being assisted by consultants there,” Gatot said Wednesday as quoted by kontan.co.id.
The state-owned enterprise has not decided yet whether the branch will be fully affiliated with the local bank there or not.
“The capitalization ranges from US$20 million to $25 million depending on the strata, [whether it will be a] full branch or affiliated,” said Gatot, who has proposed the plan to the Bank Business Plan of Bank Indonesia in 2012.
The head of BNI’s international divison, Firman Wibowo added that the new branch in Saudi Arabia has big business potential, such as remittances from Indonesian workers with transaction values totaling as much as $200 million a year, the potential from minor haj and haj pilgrimages, and allocated funds of the Indonesian Embassy.
“The embassy’s fund, which is deposited in foreign banks, reaches $30 million. We could manage the fund. In addition, there are also several Indonesian companies that are operating there,” said Firman.
BNI currently has several representative offices in Saudi Arabia and other Middle Eastern locations, including Qatar, Jeddah, Abu Dhabi, Riyadh, Dubai, Kuwait and Doha.
Meanwhile, local banks have also formed partnership with BNI, such as National Commercial Bank, Al-araji, Al-bila and Arab National Bank.
“We will focus on transactional banking for the branch in Saudi Arabia,” said Firman.(nad)