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tate-owned lender Bank Mandiri, pension insurer Taspen and postal company Pos Indonesia signed a cooperation agreement on Thursday, marking the legal beginning of their joint venture (JV) partnership.

The three companies signed the agreement at Taspen'€™s office during a ceremony that was also attended by State-Owned Enterprises Minister Dahlan Iskan and the ministry'€™s deputy for business services Gatot Trihargo.

The JV will be realized through Bank Sinar Harapan Bali, a Bali-based Mandiri subsidiary that focuses on disbursing loans to micro and small businesses on the island.

As previously reported, Mandiri, Pos and Taspen have agreed to provide loans to Taspen'€™s customers through Bank Sinar. The three companies had spent more than a year-and-a-half discussing the details of the JV, after signing a memorandum of understanding (MoU) in January 2013.

Now that the agreement has been signed, Bank Sinar will be authorized to hold a rights issue to allow Taspen and Pos subscribe to its shares, according to Mandiri president Budi Gunadi Sadikin.

Currently, Mandiri holds a 98 percent stake in the bank. With the partnership, Mandiri'€™s stake will be reduced to 57.6 percent, while Taspen and Pos will each have 20.2 percent. Bank Sinar'€™s founder will hold the remaining shares.

'€œWe are looking to increase Bank Sinar'€™s capital to more than Rp 700 billion [US$59.74 million], supported by an additional capital injection from the rights issue. We hope to gain approval from the OJK [the Financial Services Authority] soon, so that we can hold the issue early next year,'€ Budi Gunadi said.

The partnership with Taspen and Pos was expected to boost Bank Sinar'€™s business, so that its ensuing retained earnings would help propel the lender to a stronger position '€” in terms of capital '€” within the next two years, he said.

Bank Sinar'€™s latest financial report shows that its outstanding loans amounted to Rp 824.67 billion in the first half and its third-party funds amounted to Rp 898.36 billion.

Meanwhile, its core capital stood at Rp 177.71 billion by the end of June. Mandiri is slated to inject Rp 200 billion in additional capital to Bank Sinar, while Taspen and Pos are slated to add Rp 175 billion each.

Pos president director Budi Setiawan said they were looking to increase the number of Bank Sinar branches and channeling outlets to 200 from the current 70.

'€œWe are going to use Taspen'€™s 54 existing branch offices as channeling outlets and establish new ones for the remaining 76 outlets,'€ he said, adding that the postal company'€™s offices would only be used as payment points.

Meanwhile, no decisions have been taken regarding Bank Sinar'€™s new name or the future location of its headquarters. Dahlan said during the ceremony that he would leave it up to the three companies to come up with the new name.

'€œThey can choose whatever name they like. I heard that there is a suggestion to name it BTPM [Bank Taspen Pos Mandiri]. That option is also good,'€ he said.

If BTPM is chosen, it will very much resemble the name of private lender Bank Tabungan Pensiunan Nasional '€” popularly known as BTPN '€” which is also a major player in the pension segment.