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isted private lender Bank Tabungan Pensiunan Nasional (BTPN) has announced that it would double its authorized capital to Rp 300 billion (US$21.61 million) during its course to merge with the Indonesian branch of Japanese lender Sumitomo Mitsui Banking Corporation (SMBC).

The movie was approved during an extraordinary general shareholders meeting on Thursday, during which BTPN said it would make room for possible expansions.

BTPN compliance director Anika Faisal declined to elaborate on what the additional capital would be used for, but confirmed it would be part of the merger.

“This is our way of anticipating upcoming challenges for the company,” Anika told the press following the meeting. “We recognize that the company will continue to grow and expand, and therefore, an addition in authorized capital is called for.”

With the move, BTPN’s portfolio shares increased to 61 percent from the previous 22 percent, but the lender has yet to determine how much of its authorized capital would be issued or paid up this year.

Meanwhile, Anika refrained from providing details on the progress of the merger itself or when it would be completed.

“We are still at the due diligence phase, internally finalizing our merger. We are aware that it is taking a long time, but it is necessary as we want to pay close attention to all aspects of the merger,” said Anika.

Earlier in February, BTPN president director Jerry Ng said he wanted the merger to conclude by the end of 2018.

“We are happy to say that many government authorities, such as Bank Indonesia [BI], the OJK [Financial Services Authority] and the Indonesia Deposit Insurance Corporation [LPS] have welcomed the decision,” he said in a separate press conference.

However, Anika emphasized that BTPN had yet to submit a formal merger proposal to the OJK, even though the lender had met the authority to consult about its plans.

She emphasized that the OJK, as well as other related government institutions, had welcomed the merger.

“Certainly, creating a bigger, tougher bank is in line with the OJK’s plan for banking consolidation,” she said. “The OJK has warmly welcomed this decision, as long as we can contribute the best to the [banking] industry and the economy.”

Despite the capital expansion, she added, BTPN was not planning any big corporate actions as it would be focusing on the merger.

Last year, the bank had to cope with a 30 percent decrease in annual net profit to Rp 1.2 trillion, which was due to what it claims was one-off spending on consolidating and investing in its digital banking platform.

The bank disbursed Rp 736 billion for the restructuring program, which includes the voluntary termination of more than 4,000 employees, and another Rp 832 billion to develop its digital banking services, such as a platform called Wow!, which targets lower-income people. Another platform dubbed Jenius, meanwhile, targets middle-class consumers.

It reported a 12 percent year-on-year (yoy) increase in net profit to Rp 535 billion in the first quarter of this year, even though its credit only slightly increases to Rp 65.3 trillion from Rp 65 trillion in the same period in 2017.

Anika said BTPN would continue to move forward with its digitalization through Wow! and Jenius.

By the end of this year’s first quarter, Wow! had served more than 5 million customers in Indonesia’s less-developed areas, while Jenius recorded some 560,000 users.