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BRI to partner with Malaysia's Bank Rakyat
The countryâs state lender, Bank Rakyat Indonesia (BRI), is eyeing business potential in Malaysia, supported by an upcoming partnership with Bank Kerjasama Rakyat Malaysia
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T
he country's state lender, Bank Rakyat Indonesia (BRI), is eyeing business potential in Malaysia, supported by an upcoming partnership with Bank Kerjasama Rakyat Malaysia.
According to BRI president director Asmawi Syam, the bank is hopeful it will be able to seal a remittance partnership with Bank Rakyat in the near future.
'That's the most feasible partnership to do within a short period. It will widen our remittance coverage to cater to the needs of Indonesian workers there,' he said after meeting with Bank Rakyat executives and Malaysia's Domestic Trade, Co-operatives and Consumerism Minister Dato' Sri Hasan Bin Malek at BRI's office on Monday.
At present, BRI has partnerships with 12 institutions in Malaysia for its remittance business, which has generated 2.3 million transactions worth Rp 7.7 trillion (US$530.3 million) so far.
The partnership with Bank Rakyat will enable BRI to use the former's 147 branches to channel services.
'If we opened our own branch there, we may have been able to establish one branch only. So instead of doing that, we've established this partnership that will allow us to use all of those [Bank Rakyat] branches,' Asmawi said.
Bank Rakyat president and managing director Mustafha Bin Hj. Abd. Razak said both lenders expected to bank on around 2 million Indonesian workers residing in Malaysia.
'They can transfer funds back home to their BRI accounts using our network and that will generate fee-based income for us,' he said.
BRI is also looking to offer loans to the migrant workers ' whose loan collections will be assisted by Bank Rakyat in Malaysia ' and to offer various debit card services using Bank Rakyat's network.
BRI finance director Haru Koesmahargyo said the publicly listed BRI hoped the partnership would boost its share in the remittance market ' derived from transactions between Indonesia and Malaysia ' to higher than its current level of 30 percent.
'We're aiming at 50 percent,' he said.
In total, according to data from BRI, the bank managed $60.1 billion-worth of incoming remittances and $14.9 billion-worth of outgoing remittances in 2014.
Meanwhile, BRI is scheduled to begin the book building period of its bond issuance on Wednesday. It aims to raise at least Rp 3 trillion from the debt paper sale in an attempt to diversify its funding sources.
The sale is part of a larger continuous bond issuance that will take place until 2018. The bank, as previously reported, plans on issuing Rp 3 trillion-worth of bonds every year during the period.
Besides bonds, Haru said it would soon obtain $500 million-worth of fresh funds from a club deal of 11 banks to refinance its maturing US dollar-denominated bonds with the same amount.
'We are now awaiting BI's [Bank Indonesia] approval to proceed with the club deal,' he said.
The approval was needed because such a loan was considered an external debt that fell under BI's jurisdiction.
