T

he Financial Services Authority (OJK) has welcomed the possible takeover of Bank Tabungan Negara (BTN) either by Bank Mandiri or Bank Rakyat Indonesia (BRI), as the acquisition is expected to speed up the country'€™s banking consolidation.

According to OJK commissioner for banking supervision Nelson Tampubolon, if all goes as planned the acquisition will be a good example for other banks.

'€œWe want to have good, strong banks approaching the ASEAN free market and the acquisition will help realize that,'€ he told The Jakarta Post on Thursday.

Nelson said the authority had not received official notification about the plan. '€œMaybe the government, as the majority shareholder of the three banks, is still finalizing the scheme, but we will continue to push for the consolidation,'€ he wrote in a text message.

There are 120 commercial banks operating in the country, managing a total of Rp 4.64 quadrillion (US$381.61 billion) total assets. The majority or about 70 percent of the assets are handled by the top 16 banks only, including state-owned lenders Mandiri, BRI, BTN and Bank Negara Indonesia (BNI).

Separately, State-Owned Enterprises Minister Dahlan Iskan said preparations toward the state banks consolidation would involve many things and that the process must begin now before Southeast Asia'€™s banking integration in 2020.

'€œThe sooner, the better,'€ he said after a meeting at his ministry. Dahlan, however, declined to provide details.

As reported before, the government is planning to create two state anchor banks with hefty portions of assets and capital. Of the four state banks, Mandiri and BRI are projected to be the anchor banks, while BTN and BNI will merge with either Mandiri or BRI.

If Mandiri takes over BTN, the total assets and core capital of Mandiri will increase to Rp 823.4 trillion and Rp 73.47 trillion, respectively, and it will remain the biggest bank in Indonesia.

As of September 2013, Mandiri had Rp 700.08 trillion in assets and Rp 63.6 trillion in capital.

However, it will be a different story if BRI takes over BTN. Following the acquisition, BRI'€™s total assets and capital will jump to Rp 711.03 trillion and Rp 72.81 trillion, consecutively, from the current Rp 587.71 trillion and Rp 62.94 trillion.

BTN president director Maryono said he is aware of the government'€™s consolidation road map, but said he had not been informed about the acquisition plan.

'€œ[The plan] is the authority of our shareholders. I'€™m just part of the BoD [board of directors],'€ he explained.

News of the acquisition caused BTN'€™s share price to jump 7.2 percent on Thursday.