BTN Starts Acquisition Of Bank Victoria Syariah

Photo: Doc. BTN

PT Bank Tabungan Negara (Persero) Tbk (BTN) has started the acquisition process of Islamic commercial banks, namely PT Bank Victoria Syariah (BVIS), after BTN signed a conditional sale and purchase agreement (Conditional Sales Purchase Agreement/CSPA) with BVIS shareholders located in Jakarta on Wednesday, January 15, 2025.

In the agreement, BTN will take over 100% of BVIS shares from its shareholders, namely PT Victoria Investama Tbk, PT Bank Victoria International Tbk, and the Jakarta Heritage Center (BHP). Based on the summary of the Draft Takeover that has been issued by both parties to the public, Victoria Investama is the majority shareholder of BVIS with 80.18 percent ownership, followed by Bank Victoria International at 19.80 percent and BHP Jakarta at 0.0016 percent.

Through this acquisition, BTN will become the full owner of Bank Victoria Syariah with a maximum share ownership of 100 percent of all issued capital in BVIS with a total nominal value of IDR 1.06 trillion. BTN purchased BVIS with internal funding sources that have been prepared according to the bank's business plan.

President Director of BTN Nixon LP Napitupulu said BTN's corporate action against BVIS was part of BTN's plan to form a state-owned bank (BUS) through an inorganic strategy. After obtaining approval of the BVIS acquisition action plan from the regulator, BTN will separate the BTN Sharia Business Unit (UUS), namely BTN Syariah, and integrate it into BVIS into a new BUS.

BTN assesses that the development of the sharia economy in Indonesia needs to be supported by players who have competitive competitiveness or competitive advantage with comprehensive banking and financial service propositions for the housing sector. This corporate action will support the development of BTN Syariah to fulfill this position and answer the needs of customers in the sharia market. Both parties, namely BTN and shareholders of Bank Victoria Syariah, have reached a mutual agreement to support these efforts, "said Nixon.

The signing of the CSPA was based on the agreement between the two parties that had been reached after the due diligence carried out by BTN on Bank Victoria Syariah for the past few months.

Nixon said BTN chose to acquire a general bank of sharia and combine it with BTN Syariah because the process was not complicated and did not take too much time. This is because the rules and regulations regarding conventional commercial banks that have a subsidiary of Islamic banks require BTN to immediately separate its sharia business units before 2026.

Based on Law Number 21 of 2008 concerning Sharia Banking in conjunction with Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector, as well as Financial Services Authority Regulation (POJK) Number 12 of 2023, Sharia Business Units are required to be separated from their conventional bank holdings if the asset value reaches 50 percent of the total value of its parent assets, or has assets of at least IDR 50 trillion. The separation must be carried out a maximum of two years after the last quarter's financial report which states that its total assets have met the provisions.

As of the third quarter of 2024, BTN Syariah has recorded assets of IDR 58 trillion, growing by 19.2% year-on-year (yoy) from the same period the previous year of IDR 48 trillion. Based on the projection made by BTN, continued Nixon, the value of BTN Syariah assets after becoming a commercial Islamic bank will be able to reach around IDR 66 trillion-IDR 67 trillion.

Meanwhile, Bank Victoria Syariah is considered the right candidate because of its size as an adequate Islamic commercial bank and a growing business. Based on the financial statements per quarter III-2024, Bank Victoria Syariah's assets reached IDR 3.32 trillion, an increase of 8.02 percent yoy from the same period the previous year of IDR 3.08 trillion.

With the agreement of the CSPA, BTN as the buyer of BVIS shares will take the next steps according to prerequisites, namely obtaining approval from the BTN and BVIS General Meeting of Shareholders, obtaining approval from the Financial Services Authority (OJK) for BTN as the prospective controlling shareholder, and approval from the OJK for the proposed takeover transaction.

Nixon hopes that this entire acquisition process can be completed before the first semester of 2025 ends so that the merger process between the BTN and BVIS Sharia Business Units can be carried out.

"Based on the timeline we have planned, BTN Syariah can immediately spin-off as a commercial Islamic bank this year," said Nixon.

During this process, BTN stated that there had not been any changes in business operations from BTN Syariah and BTN Syariah business activities were still running as usual until the sharia business unit had legally and formally changed to a commercial Islamic bank in the form of a limited company (PT).