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rivate lender PT Bank Agris aims to raise a maximum of Rp 103.5 billion (US$8.51 million) through an initial public offering (IPO) as part of its business expansion plans next year.

Bank Agris president director Sia Leng Ho told a press conference in Jakarta on Monday that the bank was expecting to raise at least Rp 94.5 billion.

'€œThe bank will offer a maximum of 900 million shares, with a price of between Rp 105 and Rp 115 apiece,'€ he said.

He added that the shares offered were equal to 21.25 percent of the bank'€™s total equity.

According to Ho, the bank'€™s valuation reaches 1.1 times its assets compared with around 1.1-1.3 times for its peers, which have total assets below Rp 5 trillion or BUKU 1 as regulated by Bank Indonesia, saying that '€œthe valuation is considered to be fair'€.

Ho said the offering had begun on Monday and would continue until Dec. 1, while the official approval from the Financial Services Authority (OJK) would be issued in the first week of December.

'€œInitial trading will begin in the Indonesia Stock Exchange [IDX] on Dec. 22,'€ he said.

Bank Agris has appointed PT Indo Premier Securities as the underwriter for the IPO.

Ho said as much as 30 percent of the funds raised from the IPO would be used as capital expenditure to add 10 new branches next year, while the remaining 70 percent would go on loans.

Ho said the 10 new branches would comprise two general offices in Makassar, South Sulawesi, and Samarinda, East Kalimantan, as well as eight micro credit outlets in several regions in Java.

The bank needed to invest a total of Rp 10 billion for the 10 new branches, Ho added.

'€œOur loans to micro and small and medium enterprises will be channeled through Mikro Agri Solusi [MAS]. Most of the loans go to farmers of chickens, fish and shrimp,'€ he said.

Ho added that the bank also worked with cooperatives and community-based banks (BPR) through linkage programs to channel its micro and SME loans.

Currently, Bank Agris runs 19 branches in large cities in Sumatra, Java and Kalimantan, with e-banking services and trade finance services.

Ho said further that the bank expected to offer treasury and foreign exchange services to its customers in the future in an effort to join the competition in the global market.

As of September this year, Bank Agris booked Rp 2.3 trillion in loans, with a year'€™s end target of Rp 2.53 trillion.

The bank posted Rp 7 billion in net profits, with a year'€™s end target between Rp 12 and Rp 15 billion.

Ho said the bank was aiming for Rp 3.5 trillion in loans next year, with 14 percent or Rp 425 billion going to the SME segment.

'€œWe hope to reach a net profit of Rp 30 billion next year,'€ he said.

Bank Agris was established in 1973 under the name PT Finconesia as a financial institution, which then transformed into PT Bank Finconesia in 1993. In 2008, the bank changed its name to Bank Agris after an acquisition by PT Dian Intan Perkasa, part of Thailand-based Charoen Pokphand Group.

Since then, Dian Intan Perkasa has controlled 99.66 percent of the bank'€™s shares, while the remaining 0.34 percent is owned by Benjamin Jiaravanon.

'€” JP/Grace D. Amianti