DEPOK (eNBe Indonesia) - Heru Budi Hartono, acting governor of Jakarta, admitted of a review on possible initial public offering (IPO) of Bank DKI, one of the largest banks owned by regional government in Indonesia.
Then Jakarta governor Basuki Tjahaja Purnama (Ahok) actually expected IPO of the bank in 2017, but somehow his successor Anies Baswedan did not implement the plan.
Anies did announce in early 2019 that Bank DKI would be offered to public in that year, but it didn’t happen till the end of his tenure. Heru, as you know, is very close to Ahok and President Joko ‘Jokowi’ Widodo, and that he revived most of Ahok/Jokowi’s programs in the city.
Accordingly, most are more optimistic this time around. Bank DKI has reportedly appointed a number of securities to carry out this corporate action.
Bank DKI is planning an IPO with a target fund of around US$150-200 million or the equivalent of Rp2.26-3.01 trillion.
Bloomberg reported Bank DKI is working with PT BCA Sekuritas and PT CIMB Niaga Sekuritas Indonesia in a potential IPO on the Indonesia Stock Exchange (IDX), which could occur as soon as this year.
Discussions about going public are at an early stage and details of the IPO, including value and schedule, are subject to change.
If this IPO is realized, Bank DKI will join with its partners such as PT Bank Pembangunan Daerah Sumatra Utara or known as Bank Sumut, to be listed on the IDX.
Bank Sumut is seeking funds of around Rp1.49 trillion in an IPO and its listing on IDX is scheduled for February 7, 2023.
Bank DKI booked profit after tax of Rp726.38 billion in first nine months (9M) to September of 2022, grew 28.7% year on year (y/y), as net interest income rose 15% y/y to Rp2.3 trillion, and operating profit grew 18.8% y/y to Rp884.3 billion.
The Bank’s assets reached Rp75.2 trillion, of which credit accounted for Rp39.5 trillion. Third party funds reached Rp60.94 trillion.
Bank DKI has opened 5 branch offices outside Jabodetabek–in Lampung, Semarang and Sidoarjo. The opening of the branch offices consisted of 2 conventional branch offices and 3 sharia branch offices.
The opening of Branch Offices in the Lampung, Semarang and Sidoarjo areas is a step by which Bank DKI continues to increase its presence outside the Jabodetabek area.
In addition, Bank DKI is also ready to collaborate and synergize with various parties in order to accelerate regional economic growth.
Bank Indonesia (BI), the central bank, indicates positive growth of new loan disbursements in the fourth quarter (Q4) of 2022, and survey respondents predict a higher positive loan growth in the first quarter (Q1) of 2023.
The latest BI survey also reveals how respondents have remained upbeat on credit growth moving forward, predicting 8.9% year on year (y/y) growth this year.
Growth of loans disbursed by the banking industry in December 2022 stood at 11.35% y/y, up significantly from 5.24% y/y in the previous year. Improving corporate performance and household consumption are driving demand for financing.
BI said, based on such developments and in conjunction with policy synergy among the authorities, financial sector and business community, credit growth in 2023 is projected in the 10-12% y/y range.
In term of capital and liquidity, the capital adequacy ratio (CAR) in the banking industry was still high in November 2022 at 25.45%. Strong capital is contributing to minimise credit risk, as reflected by low NPL ratios of 2.65% (gross) and 0.75% (nett) in November 2022.
Meanwhile, liquidity in the banking industry was maintained in December 2022, supported by 9.01% y/y growth of third-party funds.***