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Bank Jatim to spin off sharia business in first half
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Bank Jatim agribusiness and sharia director Tony Sudjiaryanto (left to right), operational director Rudie Hardiono, president commissioner Heru Santoso , president director R. Soeroso, and corporate secretary Ferdian Timur Satyagraha pose before a press conference in Jakarta on Jan. 9. (JP/Anton Hermansyah)
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ast Java administration-owned lender Bank Jatim will spin off its sharia business unit in the first half of this year after having been issued a principal license from the Financial Services Authority (OJK).
The plan had already been approved by shareholders and was supposed to be executed in 2016. However, the bank only completed its proposal to the authority on Dec. 30 because of technical requirements, said Bank Jatim agribusiness and sharia director Tony Sudjiaryanto.
"After we get the principal license, we will need to separate the assets so that the OJK can issue an operational license for our sharia bank," he said in Jakarta on Monday, adding that the bank was currently organizing a fit-and-proper test to select a board of directors.
(Read also: Bank Jatim posts double-digit profit growth for 2016)
The bank has already allocated capital of Rp 502 billion (US$37.63 million) for the sharia bank and the East Java administration will also inject Rp 525 billion of capital after the spin-off.
"The administration will inject the funds gradually over the next three years until 2019," he said.
Bank Jatim's sharia business unit total assets increased by 31.25 percent to Rp 2.1 trillion and had disbursed Rp 828 billion funding and booked Rp 2.1 billion of net income in 2016, Tony said.
The sharia business already has some potential customers following memorandum of understanding with the country’s two biggest Islamic organizations—Muhammadiyah and Nahdlatul Ulama (NU), he said, adding that Muhammadiyah already proposed to take out a Rp 500 billion loan to build a hospital. (bbn)
