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oreign investors have shown interest in Bank Rakyat Indonesia'€™s (BRI) planned expansion into the life insurance segment, according to the bank'€™s executive.

BRI finance director Haru Koesmahargyo said on Wednesday that the state lender had been engaged in informal talks with several foreign companies about the possibility of creating a strategic partnership in life insurance.

'€œThey come from Asia, Europe and the US. We are still at an early stage because we are still waiting for JP Morgan, our financial advisor, to complete its assessment. The partnership may be in the form of a joint venture or something else,'€ he said.

Haru added that part of JP Morgan'€™s assessment included a valuation of BRIngin Life, its affiliated company that operates in the life insurance business.

BRI'€™s whole expansion scheme will see the bank take over BRIngin Life from current owner BRI'€™s pension funds and then sell some of the stake to the future partner.

It has set aside Rp 2 trillion (US$153.05 million) of its funds to finance the planned acquisition.

According to Haru, publicly listed BRI will look for about five potential partners and expects to finish a due diligence process to select the final partner before year-end. '€œHopefully everything will be clear in October,'€ he said.

The latest financial report of BRIngin Life showed that the life insurer'€™s total assets stood at Rp 4.61 trillion by the end of last year. Its net premium income amounted to Rp 1.83 trillion and its net profit reached Rp 410.36 billion.

Besides finalizing the acquisition plan, this year BRI is also looking to inject Rp 500 billion worth of additional capital each into BRI Agro, its subsidiary that focuses on disbursing loans to the agriculture sector, and BRISyariah, its subsidiary in sharia banking.

The capital injection into BRI Agro will be carried out through a rights issue program that will take place in July. BRI would fully exercise its rights as the owner of an 80.4 percent stake within the bank, Haru said.

After the rights issue, BRI Agro will have enough capital to obtain the status of a BUKU II lender, whose tier-1 capital revolves between Rp 1 trillion and Rp 5 trillion.

BRI Agro is currently listed as a BUKU I bank with Rp 886.04 billion in tier-1 capital as of March, as revealed in its financial statement.

With higher capital, it will be able to carry out a wider scope of operations, such as conducting foreign exchange transactions or issuing letters of credit for export and import financing.

Meanwhile, the capital injection into BRISyariah aimed to improve its capital adequacy ratio (CAR), to reach 14 percent from 12 percent at present, Haru said.