Indonesia’s state-owned PT Bank Tabungan Negara (Persero) Tbk, popularly known as BTN, plans to acquire small-sized sharia bank PT Bank Victoria Syariah for 1.06 trillion rupiah ($64.77 million), according to an announcement on Monday.
Both parties signed a conditional sales purchase agreement on Wednesday, per which BTN will acquire a 100% stake in Bank Victoria Syariah from its shareholders, including PT Victoria Investama Tbk, PT Bank Victoria International Tbk, and Balai Harta Peninggalan (BHP) Jakarta.
Currently, Victoria Investama is the majority shareholder with an ownership of 80.18%, while Bank Victoria International holds 19.8% and BHP Jakarta 0.0016%.
BTN president director Nixon LP Napitupulu stated that the acquisition of Bank Victoria Syariah is part of BTN’s strategy to establish a Sharia entity. Following regulatory approval for the acquisition, BTN plans to spin off its current Sharia unit, BTN Syariah, and merge it with Bank Victoria Syariah to create a new Sharia-compliant bank.
“BTN believes that the growth of the Sharia economy in Indonesia requires support from players with strong competitive advantages and comprehensive banking and financial services needed for the housing sector. This corporate action will support the development of BTN Syariah to meet the role and customers’ needs in the sharia market,” Napitupulu said in a statement.
The move also complies with the Sharia Banking Law, which requires conventional banks to spin off their Sharia entities by 2026. The law states that a Sharia entity must spin off from its holding bank if its assets contribute 50% or more of the holding bank’s total assets, or if it has assets of at least 50 trillion rupiah.
Napitupulu expects the entire acquisition process to be completed in the first half of this year. BTN stated that during this process, there will be no changes to the operational activities of BTN Syariah, and its business operations will continue as usual until the Sharia business unit is legally and formally transformed into a Sharia commercial bank.
As of July-September 2024, BTN Syariah’s assets stood at 58 trillion rupiah, an increase of 19.2% year-on-year. Meanwhile, Bank Victor Syariah’s assets stood at 3.32 trillion rupiah, up 8.03% compared to the same period last year. After the acquisition, BTN Syariah will have assets worth 66-67 trillion rupiah.
