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Jakarta Post

‘Bank Jago effect’: Small banks’ shares surge on consolidation, digital bank boost

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

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Jakarta   /   Thu, March 4, 2021   /  05:30 pm
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The Indonesia Stock Exchange (IDX) in Jakarta on Tuesday (26/5/2020). (Antara/M Risyal Hidayat)

Publicly listed small banks’ share prices have been surging in recent weeks, a trend that analysts say is likely to continue over the year, as big companies eye stakes in such lenders to meet regulatory and market demands. Lenders Bank Jago (ARTO), Bank Harda Internasional (BBHI) and Bank Neo Commerce (BBYB) are among the many “mini banks” that have been among the bourse’s top 10 gainers since the start of the year following news of their respective acquisitions. Such banks have core capitals below Rp 5 trillion (US$350.87 million). Praus Capital research head Alfred Nainggolan said the price surge was a result of the Financial Services Authority’s (OJK) push for banking industry consolidation, the pandemic-induced acceleration of bank digitalization and the small banks’ low valuations. “The trend is likely to continue,” he told Th...