JAKARTA – Sharia business units of PT Bank Tabungan Negara (Persero) Tbk (BBTN) and PT Bank CIMB Niaga Tbk (BNGA) have reportedly fulfilled requirements needed for a spin-off, according to the Financial Service Authority (OJK).

Dian Ediana Rae, Executive Chief of Banking Supervision of OJK, confirmed that as of now, BBTN and BNGA’s sharia units are currently at the preparation phase to part from its respective parent entities. The phase includes business model adjustment, infrastructure adjustment, and other various operational needs.

“We wish this [spin-off] will boost competitiveness and provide greater contribution to Indonesia’s economic development,” said Rae in the press conference yesterday (7/1).

For the record, OJK mandates that sharia unit of banks to spin-off within 2 years after its assets reached IDR 50 trillion or equal to 50% of total assets of its parent entity.

For the record, BBTN’s sharia unit’s assets arrived at IDR 57.7 trillion as of September 2024, and BNGA’s sharia unit, IDR 65.99 trillion.

Rae further said that there is still a possibility for merger and acquisition actions in order to establish a sharia bank with jumbo asset. “Let’s see who is going to submit requests for acquiring other sharia banks,” he added.

As of now, Rae believed that Indonesia is in need for a newcomer in the sharia banking industry, as it is currently dominated only by one major player, which is deemed not optimal for sharia bank business competition. (KR/ZH)