T

he country’s largest lender Bank Mandiri has formally become the majority shareholder of life insurance firm AXA Mandiri Financial Services after buying additional 2 percent shares from National Mutual International Pty Ltd (NMI), a unit of the world’s biggest insurance firm AXA Group.

With the share purchase, Mandiri ownership in AXA Mandiri rose to 51 percent from the previous 49 percent. NMI, a wholly owned subsidiary of AXA Asia Pacific Holdings Ltd, now owns 49 percent shares of AXA Mandiri, Inkawan D. Jusi, Bank Mandiri’s senior vice president of wealth management, said in Jakarta on Monday.

“Bank Mandiri has four main businesses: Banking, insurance, micro and financing. We believe in the importance of a full commitment to each sector and therefore acquired ore stakes in order to become the majority shareholder,” he told The Jakarta Post.

AXA Mandiri, founded in November 2003 as a joint venture between state-owned Bank Mandiri and Australia-based NMI, is a life insurance firm established based on the Australian legal basis.

“Both parties signed a share sale and purchase agreement in December last year that allows Bank Mandiri to buy 2 percent shares of AXA Mandiri from NMI,” Bank Mandiri said in a statement.

Inkawan added that with the purchase of an additiona, 2 percent, AXA Mandiri will become a full subsidiary of Bank Mandiri and its financial reports would as a consequence be consolidated into the bank’s financial statements.

According to Bank Mandiri’s statement, the plan to add 2 percent shares to AXA Mandiri has been approved by the central bank, as well as by shareholders in an annual shareholders meeting held in May this year.

AXA Mandiri has a total asset of Rp 7 trillion (US$780 million) up to July, 27.6 percent higher than the same period last year at Rp 5.55 trillion. It booked a 108 percent increase in net profit as of July, from Rp 105.33 billion to Rp 219.25 billion. The AXA Mandiri return on equity stood at 86.7 percent in July, versus last year’s 55.9 percent.

The firm said on its website it had more than 400,000 customers throughout Indonesia, which were served by 1,300 financial advisors spread throughout 1,000 Bank Mandiri branches.

Bank Mandiri shares (BMRI) rose following the announcement Monday, to close up 0.83 percent, or 50 points, to Rp 6,050 per share, outperforming the broader Jakarta Composite Index (JCI) 0.35 percent increase to another new record high of 3,128. (est)