Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia have agreed to combine Shariah-compliant units.
Indonesia is pushing ahead with a years-long plan to merge the Islamic units of its state-owned lenders, which could form an entity with $15b of assets by February 2021, reports Bloomberg.
Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia signed a conditional deal on Monday to combine their Shariah-compliant units.
The merged entity's assets could reach 390 trillion rupiah ($29.07b) by 2025, up from 225 trillion rupiah by end of 2020 ($15.7b), as its scale helps it better compete with non-Islamic lenders.
The resulting bank "will raise Indonesia's profile on the global stage and revive the domestic Shariah economy," said Hery Gunardi, vice president director at Bank Mandiri.
Indonesia, home to the world's largest Muslim population, has sought to form a mega Islamic bank since at least 2015.
Bank BRI Syariah will be the surviving entity as part of the current deal.
Here’s more from Bloomberg.
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