Jakarta, CNBC Indonesia – The Financial Services Authority (OJK) stated that there will be many BUKU I banks (business group commercial banks, with a core capital of IDR 100 billion-IDR 1 trillion) that will merge to meet the minimum capital requirement of IDR 1 trillion this year and IDR 3 trillion in 2022. .
What is the potential for bank stocks with insufficient capital to carry out this corporate action?
Is it better to look from the side, or is it better to try your luck and get into these stocks while their status has not been upgraded from BUKU I Bank to BUKU II Bank (core capital IDR 1 trillion-IDR 5 trillion)?
“Horrified delicious”, perhaps the phrase popularized by the late politician Sutan Bhatoegana is the most suitable to describe the potential and risk of collecting shares in Bank BUKU I.
The horror of collecting BUKU I Banks is due to the OJK ultimatum that if BUKU I banks cannot meet the core capital requirement of more than IDR 1 trillion by the end of the year, the bank will bedowngrade became the People’s Credit Bank (ACA).
This will create new problems because according to OJK regulations, BPRs cannot be owned by foreign investors so that the status of this downgraded bank in the capital market will be a question mark?
Will the regulator later provide a special notation for shares that cannot be purchased by foreign investors and foreign investors who have already entered must be bought back by the company?
Or forced to sell their stake in the market?
Everything is still a question mark.
In fact, it is not impossible that the downgraded bank shares will be ‘kicked’ from the alias stock exchange delisting.
When di-delisting of course investors will lose big because when this happens involuntary delisting then the issuer does not have to buyback public shares, so that later your shares will be converted into scrip and cannot be transacted again on the IDX.
Horrible isn’t it?
But do not forget there is a sweetness behind this horror.
The pleasure of collecting mini bank shares is when it turns out that there are strategic investors who have injected funds and it turns out that these investors are big-scale investors, then it is not impossible that the bank’s share price will jump hundreds of percent.
Take, for example, the shares of PT Bank Jago Tbk (ARTO) which used to be called Bank Artos.
ARTO shares had soared 3,416% or 34 times its highest level after the company reported startup Gojek giants will be ARTO’s strategic investors.
Based on CNBC Indonesia’s records, several banks that are chasing additional capital obligations if they don’t want to go down class include BPD Banten, BPD Central Sulawesi, BPD Lampung, PT Bank Harda Internasional Tbk (BBHI), PT International Business Bank Tbk (BBSI), PT Bank Pembangunan Daerah Banten Tbk (BEKS), Bank Fama, and BPD Bengkulu.
This means that there are three shares of BUKU I Bank whose shares can be collected by risk-loving investors, namely BBHI, BBSI, and BEKS.
Bank Harda only has core capital of IDR 272.03 billion as of June 2020. Thus, in the next 2 months, the company is required to increase its capital of at least IDR 728 billion.
WhereYemen BBHI senot yet revealed that they are still in the process of exploring with several strategic investors who are ready to inject capital into the company this year.
“The total must be Rp 1 trillion, now the core capital is around Rp 300 billion. There is also an OJK regulation regarding consolidation,” he said. Director of Bank Harda, Harry Abbas, to CNBC Indonesia.
The plan to increase Bank Harda’s capital is targeted to be realized this year, but it has not been able to provide information related to potential strategic investors.
As for the company’s Business Bank next month will ask for permission from the EGMS to do so right issue which will be held before the end of the year to meet the core capital obligations of the OJK.
Long story short, if you are a conservative investor who puts his funds in good fundamental stocks that have bright business prospects, mini bank stocks are not for you.
However, if you are an investor who likes to speculate and think that the benefits that will be obtained when collecting these small banks are greater than the risks, then Book I bank shares may be for you.
But again, it’s all back on the investment horizon, and your budget.
CNBC INDONESIA RESEARCH TEAM