Bank Bukopin president director Glen Glenardi said earlier this week that the firm, as the parent company of the sharia lender, was still communicating with Affin Bank in relation to the technicalities of the share divestment.

“We are still communicating, we have planned it since last year. Affin Bank intended to buy the majority of the shares, around 60 percent, but the regulations in Indonesia do not allow it. We can only divest about 40 percent,” he told The Jakarta Post.

Due to its vital role in the financial market, both of the lenders must go through tight scrutiny by regulators before finalizing the transaction. Affin Bank is also bound by many regulations in Malaysia and is required to obtain approval from Bank Negara Malaysia for the acquisition.

Affin Bank is a wholly owned subsidiary of Affin Holdings Berhad which is listed on the Malaysia stock exchange. It provides Islamic banking products and services via its Islamic banking subsidiary Affin Islamic Bank Berhad or Affin Islamic.

Affin Islamic commenced operations on April 1, 2006 as a fully-fledged Islamic bank, and offers a complete range of Islamic banking products and services for individuals and corporations that are in compliance with sharia principles and rules.

Glen added that both parties must also work on technical problems, such as different business perceptions.

“There are still many technical problems that have not been finalized yet between Bukopin and Affin Bank. It’s still early in the process,” he said.

Aside from Malaysia’s Affin, Bank Syariah Bukopin business director Aris Wahyudi told the Post that other investors, some from Qatar, had expressed an interest in share ownership in the Islamic bank.

However, given the current unstable global economy, none of the interest had been brought to finalization. “We’ll keep on following up with those investors. We will take the highest bid, which will help us to develop the company. Administratively, we are ready for that,” he said.

Bukopin, previously known as Bank Swansarindo Internasional, was established in 1990 in Samarinda, East Kalimantan, before being acquired by the country’s second-largest Islamic organization, Muhammadiyah, in 2001 and rebranded PT Bank Persyarikatan Indonesia.

Later in 2008, Bank Bukopin injected capital into the lender and again rebranded it as Syariah Bukopin. Currently it operates 12 branches and is planning to open new branches in Pekanbaru, Riau, and Denpasar, Bali.

The cooperation with the foreign investor is designed to “increase the bank’s capital for further expansion” the bank says. Syariah Bukopin will add 30 more counters called “Syariah Service Offices” in its parent’s branches across the country.

Reza Priyambada, an analyst at Binaartha Sekuritas said Affin Bank was most likely attracted to Indonesia’s potential as the largest Muslim-populated country, which is a natural market for Islamic banking.

However, Reza predicted that the takeover would not have a major impact on the shares of Bank Bukopin as the parent company in the short term, because Syariah Bukopin’s contribution to its total revenue was still limited.

“But we will have to see whether Bukopin gives up all of its sharia business to the Malaysian bank, or it will still hold the majority share,” he said.

“If Bukopin still holds [the majority of the shares], then it will enjoy a bigger contribution form Syariah Bukopin, and will see a positive impact [on the parent’s shares].”(yon/dra/ecn)

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