Publicly listed Bank Central Asia (BCA) has injected Rp 1 trillion (US$72.76 million) of capital into its newly acquired subsidiary Bank Royal Indonesia, boosting the latter to BUKU II bank category.
Banks in the BUKU II category have a core capital of Rp 1 trillion to Rp 5 trillion.
After the injection on Jan. 30, Bank Royal’s issued capital and paid-up capital jumped to Rp 1.29 trillion each from Rp 287.2 billion, BCA corporate secretary Raymon Yonarto wrote in a statement to the Indonesia Stock Exchange (IDX) dated on Monday.
Shares in BCA, trading on the IDX with the code BBCA, jumped 2.48 percent on Tuesday.
“Given that the regulation only allows banks in the BUKU II category and above to provide electronic services, the injection is necessary to boost Bank Royal’s capital to realize BCA’s business plan,” Raymon wrote, referring to a Financial Services Authority (OJK) regulation. “The injection is in line with our business plan to allow Bank Royal to focus on serving as a digital bank.”
Earlier in 2019, BCA concluded its acquisition process of Bank Royal for Rp 1.01 trillion in an effort to expand its business and focus on a certain customer segments.
Following the corporate action, the country’s largest private bank by asset value announced in December that it had agreed to buy all of Rabobank International Indonesia’s 3.72 million shares from its shareholders. The acquisition of the local arm of Dutch bank Rabobank was worth Rp 397 billion.