Expanding Business Horizons: Bank Jatim and Bank Lampung Sign MoU for Bank Business Group (KUB) Integration.
Date: 30 november 2023Categories :
SURABAYA, November 30, 2023. PT Bank Pembangunan Daerah Jawa Timur Tbk (bankjatim) is becoming increasingly aggressive in expanding its business reach. Most recently, the issuer traded under the ticker code BJTM signed a Memorandum of Understanding (MoU) with PT Bank Pembangunan Daerah Lampung (Bank Lampung) regarding the formation of a Bank Business Group (KUB) on Thursday (30/11). Held at the JW Marriott Hotel, the MoU was signed directly by the President Director of bankjatim, Busrul Iman, and the President Director of Bank Lampung, Presley Hutabarat.
Busrul explained that this MoU pertains to compliance with the Financial Services Authority (OJK) Regulation No. 12/POJK.03/2020. Within the agreement, both parties agreed that capital participation would be carried out with a specific nominal amount to be determined at a later date. Furthermore, both parties have agreed to adopt a bank consolidation scheme in the form of a KUB for their existing banking entities.
The MoU also stipulates that bankjatim will serve as the Parent Company within the KUB scheme, exercising both direct and indirect control. “This KUB provides numerous benefits for both parties, increasing value for shareholders and delivering superior services to customers. Therefore, the spirit of synergy must always be encouraged,” Busrul asserted. The banking synergies between bankjatim and Bank Lampung cover a wide range of areas, including credit/financing, liquidity, services, and banking operations.
The formation of this KUB is not a first for bankjatim; it aligns with one of the corporate transformations launched by the company last year—executing strategic corporate actions. Bankjatim believes that the more members a KUB has, the stronger the group becomes, creating a larger ecosystem. “Stronger synergy across various sectors will provide added value for both bankjatim and other Regional Development Banks (BPD),” he remarked.
Previously, bankjatim initiated the KUB process with Bank NTB Syariah. The progress with Bank NTB Syariah has reached the stage of inclusion in the Bank’s Business Plan (RBB), the appointment of independent consultants, the drafting of Shareholder Agreements and Conditional Share Subscription Agreements, and is currently in the negotiation phase for share pricing.
“We are actively targeting the formation of KUBs because they yield various positive impacts, such as creating inorganic growth for bankjatim. By forming a KUB, we are designated as the Parent Bank, which allows us to increase the company's assets through inorganic expansion,” Busrul explained.
The benefits do not stop there. Another critical advantage is the fulfillment of Core Capital requirements for BPDs. As stipulated in POJK 12/2020 regarding the Consolidation of Commercial Banks, BPDs are required to increase their minimum core capital to IDR 3 trillion by December 31, 2024. However, if a BPD is effectively integrated as a member of a KUB, the minimum core capital requirement is reduced to just IDR 1 trillion.
Beyond capital reinforcement, the KUB initiative also aims to accelerate digitalization, improve governance and professionalism standards, facilitate inter-bank money market arrangements, and develop shared payment systems.
“A KUB can create optimal synergy because member banks can share resources, infrastructure, and knowledge, which enhances operational efficiency. KUB also provides economies of scale for member banks through the shared use of technology, market research, product development, and marketing, thereby increasing competitiveness,” Busrul stated.
He expressed optimism that the formation of such KUBs would provide a positive contribution to East Java, supported by bankjatim’s increasingly robust performance. Bankjatim maintains a strong capital ratio with a Capital Adequacy Ratio (CAR) of 25.81% as of October 2023. Additionally, bankjatim earned a Composite Rating of PK-2 (Healthy) in its self-assessment for the June 2023 period, reflecting the bank's generally sound condition.
“KUB initiatives must continue to be driven, considering that East Java is the second-largest national contributor to the Gross Regional Domestic Product (PDRB). Furthermore, East Java serves as the center of gravity for the Eastern Indonesia region. Therefore, this will certainly have a massive impact on the economy,” Busrul concluded.
PT BANK PEMBANGUNAN DAERAH JAWA TIMUR Tbk
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