BCA to enter life insurance business
The Jakarta Post
Largest private lender PT Bank Central Asia (BCA) is likely to debut its life insurance subsidiary later this year, which will make the bank one of the country's most diversified financial services group.
BCA president director Jahja Setiaatmadja said in Jakarta on Wednesday that the publicly listed bank had submitted the necessary documents to the Financial Services Authority (OJK) to obtain a life insurance permit.
'We hope to obtain a life insurance permit within the next two months,' he told a press briefing, adding that the expansion into the insurance business was part of BCA Group's long-term effort to maintain its dominance in financial services.
Currently, the group's businesses consist of commercial banking through BCA, Islamic banking through PT Bank BCA Syariah, automotive financing through PT BCA Finance and PT Central Santosa Finance and loan financing through Hong Kong-based BCA Finance Limited, general insurance via PT Central Sejahtera Insurance and stock market business via PT BCA Sekuritas.
'The life insurance company will be brand new, not a joint venture, and will be fully owned by BCA. It will have a nationwide focus since our existing customers are scattered across the country,' Jahja said in Jakarta on Wednesday. BCA will inject Rp 100 billion (US$10.26 million) as paid capital for the new company, to be named BCA Life.
'After life insurance, we plan on establishing another subsidiary in asset management, but that will probably happen next year,' he said.
One of its latest subsidiaries, BCA Syariah, still gave a small contribution to BCA's lending portfolio with Rp 999.37 billion or 0.4 percent of total outstanding loans last year. However, the figure rose more than double from 2010, when BCA Syariah began its operations.
The Islamic unit's savings stood at Rp 232.81 billion, or 0.1 percent of BCA's total third-party funds in 2012, growing more than two fold also from 2010.
Another subsidiary, BCA Sekuritas, which the group acquired in 2011, has also performed well. This year it hopes to become one of the country's biggest underwriters with at least seven bonds issuances, worth a total of Rp 20.45 trillion, in the pipeline.
Besides expanding into new fields, Jahja said the group would maintain its dominance in financial services by strengthening its banking business. In terms of assets, BCA is currently the country's second-largest bank. In 2012, BCA's total assets surged 16 percent to Rp 442.99 trillion, while its net profits climbed 8.3 percent to Rp 11.72 trillion from a year before.
In 2013, it plans on operating at least 2,000 new ATMs to add to its existing 12,173 ATMs. Hundreds of the new ATMs will also function as cash deposit machines and the dual function will enable the bank to increase its business efficiency, Jahja said. 'We will be able to reduce the costs of delivering and picking up the cash because it will revolve continuously,' he added.
BCA recently connected its ATM system with that of PT Bank Negara Indonesia (BNI), another major bank, in a further effort to boost both banks' efficiency and fee-based income. BCA is a member of Prima network, while BNI, with 8,279 ATMs, is a member of ATM Bersama.
In 2013, BCA and BNI are eyeing an increase of Rp 50 billion in fee-based income, each, from the integration. As of March 2013, BCA's fee-based income stood at Rp 1.42 trillion, while that of BNI amounted to Rp 1.28 trillion.
Meanwhile, in lending, BCA expects to see an increase in credit disbursement of 20 percent this year. In the first quarter, its lending grew 26.7 percent, boosting its net interest income growth by 25.6 percent to Rp 6.03 trillion.
You might also like :
- Rain puts out forest fire on Mt Lawu
- Intel CEO resigns after probe of relationship with employee
- Indonesia poised to benefit as China's Belt and Road turns green
- Here are 10 of the most populated cities in the world
- UK visa requirements relaxed for Indonesian students
- Indonesia's growing thirst for coffee drains premium bean supplies
- Pro IS cleric gets death for inspiring terror attacks in Indonesia
- India offers free e-visa for Indonesians
- Britain's Prince William on historic trip to Israel and West Bank
- Malaysia's Najib explains why he had so many luxury handbags, lots of cash, jewe...