(17 February 2016 – Indonesia) Indonesia’s government plans to form a holding company that will own shares in all state-controlled banks by 2018.
The move seeks to increase efficiency and equity of local lenders, Deputy minister Gatot Trihargo said.
Jakarta plans to set up an investment firm to work as the holding company for some of country’s biggest banks including Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia and Bank Tabungan Negara.
“With a holding company, we can strengthen recurring income,” Trihargo said earlier this week.
According to Indonesia’s central bank, lenders manage capital risks well, with an average capital adequacy ratio at 21.1 percent as of November 2015, but are small compared to peers in neighbouring countries.
Banks have been pushed by both the country's banking regulator and central bank to merge to shore up equity. The regulators want to halve the number of banks operating in South East Asia’s largest economy from around 120.
However, Trihargo indicated that the government will end plans to merge all state-owned sharia banks, instead courting investors from the Middle East.