BCA finance director Vera Eve Lim said on Aug. 28 that the bank expected to go forward with the merger in 2021 should the acquisition process go smoothly.

“We’re currently focusing on completing Rabobank’s acquisition process with the Financial Services Authority [OJK], and once we finish, we’ll go forward with the merger,” she said during a virtual press briefing.

BCA acquired all 3.72 million shares of the local arm of Dutch lender Rabobank from its five shareholders in December 2019, including its parent company Cooperatieve Rabobank UA.

The country’s biggest privately owned bank by assets would buy Rabobank Indonesia’s shares for a total of US$20.5 million and one-time adjusted book value on closing.

Vera went on to say that the merger between Rabobank and BCA’s sharia-compliant entity was aimed at grabbing the potential that Islamic banking presents in Indonesia.

“I think there’s always an opportunity in the sharia market, especially in the commercial and small and medium enterprises [SME] segment,” she said, adding that the bank would continue BCA Syariah’s focus on SMEs and the retail segment.

She went on to say that the merger would increase the Islamic banking entity’s core capital without mentioning the figure.

She said Rabobank’s core capital stood at Rp 384 billion, while BCA Syariah’s core capital stood at Rp 2.31 trillion as of 2019 after it injected Rp 1 trillion in capital in September of last year.

BCA Syariah’s assets, meanwhile, stood at Rp 8.63 trillion in 2019 or up by 22.23 percent from the previous year.

Given that BCA is aiming to grow the business, Vera said the bank had yet to have any intention to list BCA Syariah on the Indonesia Stock Exchange (IDX).

In the meantime, Vera said BCA would focus on broader digital bank development and was testing the product on its own employees.

“The launch will still be on schedule, October or November of this year,” she said, adding that it would target mainly millennial customers.

BCA developed the digital bank after successfully acquiring Bank Royal in November 2019 for Rp 1.01 trillion.

Following the acquisition, BCA injected Rp 1 trillion in capital into Bank Royal, making its issued and paid-up capital jump to Rp 1.29 trillion each from Rp 287.2 billion and boosting it to become a BUKU II bank category with a core capital of Rp 1 trillion to Rp 5 trillion.

The plan was also in line with the digital banking trend during the pandemic, as it saw a 35-percent increase in digital banking transactions to Rp 5.1 billion as of the first half of this year.

Jasa Utama Capital analyst Chris Apriliony lauded BCA’s plan to merge Rabobank with its Islamic bank subsidiary because of the huge potential from the large number of Muslims in Indonesia.

“The merge would also impact the bank positively as it could significantly reduce operational cost in the long run,” he said.

BCA’s shares, listed under the code BBCA at the IDX, have lost 3.37 percent of their value since the beginning of the year. As of 11 a.m. on Monday, the shares dipped slightly by 0.54 percent to Rp 32,300 apiece. 

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