IslamicFinance.de

Indonesia's three state-owned banks will merge their sharia banking units to create one of the country's biggest lenders. Bank Rakyat Indonesia, Bank Mandiri and Bank Negara Indonesia have signed a conditional merger agreement for their Islamic banking units. The new bank will have combined assets of 207 trillion rupiah ($14 billion), making it the eighth-largest lender by assets in the country. The merger is slated to complete next year and is still subject to approval from regulators and shareholders. Indonesia is keen to position the country as the hub of the region's Islamic economy. The country's five-year master plan aims to increase the market share of Islamic financing in the country to 20% by 2024.

The nation’s eight largest banks, representing 46 % of national banking assets, have committed to implementing sustainable financing as part of global environment goals.

Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), Bank Negara Indonesia (BNI), Bank Muamalat, BRI Syariah, Bank Jabar Banten (BJB) and Bank Artha Graha Internasional signed the commitment with the Financial Services Authority (OJK) and the World Wildlife Fund (WWF) Indonesia on Monday. The commitment was manifested in a pilot project called “first step to becoming a sustainable bank”, marking a big move taken by the banks less than a year after the OJK launched the 2014-2019 Sustainable Financial Roadmap, according to OJK head Muliaman D. Hadad.

“I hope these eight banks, which are the prime movers in this project, can encourage other banks and financial institutions to join the country’s implementation of sustainable finance,” Muliaman said in his speech. Through the green banking pilot project, Muliaman said participating banks were expected to balance their pursuit of profits with willingness to conserve the environment, serving as examples to their peers.