S

tate-owned lender Bank Rakyat Indonesia (BRI) is finalizing its acquisition of a life insurer this year and is preparing to acquire finance and securities firms in its 2016 business plan, its executives have said.

BRI finance director Haru Koesmahargyo said in Jakarta on Wednesday that the publicly listed bank was currently in the process of finalizing its acquisition of life insurance company BRIngin Life, which is controlled by the lender'€™s pension fund Dapen BRI.

BRI already submitted its plan to acquire BRIngin Life to the Financial Services Authority (OJK) and the company expects to acquire all shares owned by Dapen BRI, he said. '€œWe are finalizing our acquisition of the life insurance company and we are arranging our long-term plan to enlarge the capacity of our subsidiaries. However, we have not set the exact target and time period for that,'€ Haru said on Wednesday.

After BRIngin, the bank also intends to acquire multi-finance and securities companies as part of its long-term expansion plan in the financial sector. Haru said that the plan to acquire multi-finance and securities firms would be included in the bank'€™s 2016 business plan to be submitted to the OJK by the end of November.

In its official letter published on the Indonesia Stock Exchange'€™s (IDX) website on Oct. 20, BRI announced that it had already signed a conditional sale and purchase agreement with Dapen BRI and that it planned to take over all of the shares owned by the latter in BRIngin Life.

Dapen BRI currently controls 90.17 percent of BRIngin Life, while the remaining 9.56 percent and 0.27 percent are owned by the Employee Welfare Foundation of BRI and the Employee'€™s Cooperative of BRIngin Life, respectively.

BRIngin Life recorded total assets of Rp 4.5 trillion (US$330.7 million) by the end of first half of this year, with Rp 1.04 trillion in total equity. BRI president director Asmawi Syam said previously that the bank had allocated Rp 3 trillion to finance its upcoming acquisitions.

Last year, then BRI president director Sofyan Basir said that the bank was interested in taking over state-owned life insurer Jiwasraya in order to merge it with BRIngin Life to create a major life insurance firm. However, the plan never came to fruition.

'€œWe have yet to decide the strategic investors [that will be invited to improve BRIngin Life] because we want to complete the first step before continuing to another one,'€ Haru said.

BRI currently has three subsidiaries, namely agriculture-focused bank BRI Agro, sharia lender BRI Syariah and the remittance office BRI Remittance Hong Kong.

Haru said BRI was considering acquiring finance and leasing company BTMU-BRI Finance, in which it owned a 45 percent stake. The remaining 55 percent is held by Bank of Tokyo-Mitsubishi UFJ, the Indonesian branch of Japanese financial giant Mitsubishi UFJ Financial Group.

'€œWe are still reviewing the idea and have yet to decide whether to develop the company by our self or divest our shares because we are only a minority shareholder,'€ he said.

BRI vice-president director Sunarso said BRI was prepared to maintain its capital adequacy ratio (CAR) above 20 percent, which was essential for its corporate long-term plan to expand subsidiaries. As of September, BRI has a 20.6 percent CAR, an increase from the 18.57 percent recorded in the same period last year.