When KB Kookmin Bank controls Bukopin

Paul Sutaryono
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PREMIUM

Jakarta / Tue, July 21, 2020 / 01:51 pm

Banking affairs: A customer fills out a document at Bank Bukopin on Jl. MT Haryono in South Jakarta on Wednesday. The Financial Services Authority approved on Tuesday Bank Bukopin’s rights issue, the proceeds of which will be used for working capital to increase credit. (JP/Wendra Ajistyatama)

The Financial Services Authority (OJK) has been trying to accelerate the consolidation of the banking industry, which has long been overcrowded by weak small and mid-size banks, especially now under the pandemic-induced economic crisis. And as the country is struggling with public health and economic crises caused by the COVID-19 pandemic, many of the banks have been facing liquidity pressures because many businesses made big losses and failed to service their loans. Hence, the great enthusiasm of South Korean KB Kookmin Bank to take control of Indonesian mid-size Bank Bukopin should soothe the OJK’s worry, especially because Bukopin has been suffering severe liquidity pressures and even a bout of small runs by depositors over the past few weeks. In fact, the Supreme Audit Agency had warned that OJK supervision of Bukopin’s performance for 2019 was quite inadequate, ...