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rivate lender Bank Ganesha held an initial public offering (IPO) on Thursday in a bid to improve its grade and expand business.

The lender will float 6.1 billion shares, 63.44 percent of its paid-up capital, with an offering price of around Rp 102 (less than 1 US cent) to Rp 105 apiece, hoping to reap between Rp 620 billion and Rp 640 billion of funds.

The bank has appointed PT Indo Premier Securities as underwriter.

Of the shares offered to the public, a maximum of 10 percent, 610 million shares, will be allocated for an employee stock allocation (ESA) program.

The book-building period started on Wednesday and will run until Feb. 24. Meanwhile, the listing of the shares on the Indonesia Stock Exchange (IDX) is slated to happen in the first week of March.

The bank is also carrying out a rights issue with equity investment company PT Equity Development Investment, which is the lender'€™s majority shareholder, for a maximum of 2.4 billion shares, worth around Rp 240 billion.

Bank Ganesha president director Surjawaty Tatang said that funds raised from the IPO would upgrade the bank'€™s category from BUKU I to BUKU II and enable it to expand delivery channels and sell a wider range of products.

'€œOur core capital will be slightly higher than Rp 1 trillion after the IPO,'€ Surjawaty said.

BUKU I is the lowest category and lists banks with core capital below Rp 1 trillion, followed by BUKU II with core capital between Rp 1 trillion and Rp 5 trillion.

BUKU III category includes banks with core capital between Rp 5 trillion and Rp 30 trillion and BUKU IV '€” the highest '€” catalogs banks whose core capital exceeds Rp 30 trillion.

The current status of Bank Ganesha allows it to perform only basic activities, such as collecting third-party funds and distributing loans, while other operations require approval from the Financial Services Authority (OJK) and Bank Indonesia (BI).

Surjawaty said the new status would enable her firm to provide bancassurance services and to develop mobile and internet banking services.

'€œWe will also use the IPO funds to expand our credit,'€ she said, adding that the lender was aiming for lending growth of more than 20 percent this year from around Rp 300 billion of outstanding loans last year.

The lender would also add one branch office to the existing 17 and four to five new ATMs this year.

Indo Premier associate director Eban S. Banowo was confident that the IPO would achieve the target as currently the banking sector had shown a good performance in the Jakarta Composite Index (JCI).