Large Indonesian banks are not interested in purchasing small banks
JAKARTA. The Financial Services Authority's (OJK) plan to raise the minimum core capital limit for banks, does not make a number of large banks interested in acquiring BUKU I banks.
Lee Young Jun, Analyst of Mirae Asset Sekuritas, assessed that the change in the core capital limit has the potential to increase the efficiency of BUKU I banks. However, it has no significant impact on the banking sector.
"We do not believe that changing the minimum core capital limit for small banks will cause major changes in the banking industry in the future," explained Jun in his research.
Jun explained that currently there are 17 BUKU I banks, including Islamic ones. He also claimed to have talked with 4 major banks in Indonesia, regarding the change in the limit. "They [4 big banks] do not see attractive targets for acquisitions among small banks," Jun said.
Therefore, Mirae Asset Sekuritas maintains a neutral outlook on the banking sector. (KR/AR)