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BCA acquires stake in affiliated insurance firm
The largest private lender by assets, Bank Central Asia (BCA), has placed a stronger footprint in the non banking business after integrating a general insurance company under its corporation
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he largest private lender by assets, Bank Central Asia (BCA), has placed a stronger footprint in the non banking business after integrating a general insurance company under its corporation.
BCA said on Tuesday that it had acquired a 75 percent stake in life insurance company PT Central Sejahtera Insurance from its affiliated pension fund, Dana Pensiun BCA.
According to an announcement made public on Tuesday, BCA and the pension fund agreed late last week the bank's purchasing of a 75 percent stake in Central Sejahtera Insurance for Rp 102 billion (around US$10.3 million).
Prior to the deal, BCA, through its wholly owned subsidiary PT BCA Finance, already held 25 percent in Central Sejahtera. BCA said the purchase of a stake in Central Sejahtera was part of the bank's long term investment and integration of new business for thorough financial services.
'Central Sejahtera Insurance will synergize with the bank's lending to consumer sector, particularly mortgage and credits for cars through insurance products,' BCA said in the announcement.
Central Sejahtera reported Rp 80.31 billion in revenue in 2012, almost a four time increase compared to Rp 26.45 billion in 2011. Its net profit stood at Rp 20.19 billion in 2012, also a significant jump compared to Rp 8.73 billion year on year.
'Central Sejahtera rose by four times last year because the amount base was still low. In the future, it must be better, however, the increase won't be four times anymore,' BCA president director Jahja Setiaatmadja said in a text message.
Central Sejahtera's total assets reached Rp 293.34 billion as of the end of December last year.
BCA has said that it aimed to obtain a license to run a life insurance business from the Financial Services Authority (OJK). The lender is planning to establish a new subsidiary called BCA Life soon after it obtains the license. BCA plans to inject Rp 100 billion in paid capital for the new insurance company.
The insurance businesses will complete the company's diversified portfolio. It currently has a number of subsidiaries, such as PT Bank BCA Syariah, automotive financing PT BCA Finance and PT Central Santosa Finance, and securities business via PT BCA Sekuritas.
Joseph Pangaribuan of PT Samuel Sekuritas Indonesia said that BCA would likely perform well in the insurance business.
'The bank has the channels. It may also make the most from its customer base as well as big corporate debtors,' Joseph said.
BCA served more than 11 million customer accounts as of the end of March. It has 1,021 branches and 12,173 automatic teller machines (ATMs) nationwide as well as hundreds of thousands of card swipe machines linked to its Internet and mobile banking services.
BCA is currently 47.15 percent owned by tycoons Robert Budi Hartono and Bambang Hartono, 1.76 percent by Anthoni Salim and the remaining 51.09 percent by the public.
At present, the financial 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, loan financing through Hong Kong-based BCA Finance Limited, general insurance via PT Central Sejahtera Insurance and stock market business via PT BCA Sekuritas.
