More Regional Banks to Go Public, Competition Heats Up!

KONTAN.CO.ID - JAKARTA. The number of Regional Development Banks (BPD) that list their shares on the domestic stock exchange is increasing. Currently, there are Bank BJB (BJBR), Bank Jatim (BJTM), and Bank Banten (BEKS). The latest is Bank DKI, which will hold its initial public offering (IPO).

Bank DKI aims to raise fresh funds of IDR 3 trillion through this event. Previously, Bank Sumut also planned to conduct an IPO on January 5-8, 2023, but the plan was postponed.

Agus Condro Wibowo, Secretary of Bank Sumut, said that Bank Sumut is arranging a new timeline for the IPO schedule to optimize the initial public offering. However, Bank Sumut remains committed to continuing the IPO process. Bank Sumut targets to raise fresh funds of up to IDR 1.49 trillion.

According to Nicodimus Kristiantoro, Research & Consulting Manager at Infovesta, both banks have healthy fundamentals. Using the financial statements from September 2022, Bank DKI became the fourth-largest regional bank group in terms of total assets, and Bank Sumut ranked fifth. "Fundamentally, the financial statements also show net profit growth," said Nicodimus to Kontan on Thursday (9/3).

However, Nicodimus reminded investors who want to buy regional bank shares to pay attention to liquidity. Because it can be said that regional banks are less liquid than conventional banks.

But Budi Frensidy, Professor of Finance and Capital Markets at the Faculty of Economics and Business, University of Indonesia (UI), stated that BJBR and BJTM are relatively preferred by investors. Because both are known to be quite generous in distributing dividend yields. "Can the two BPDs that will IPO be like that?" said Budi.

Meanwhile, the performance of BPDs was able to grow optimally last year. Along with the increase in profits, regional banks are preparing to distribute dividends to their investors.

Yuddy Renaldi, CEO of Bank BJB (BJBR), said that they will hold the Annual General Meeting of Shareholders (AGM) on April 4, 2023. One of the agendas that will be discussed is the use of net profit, including dividend distribution to investors. "God willing, it will be better than the 2022 fiscal year. Still being calculated. Bank BJB needs capital strengthening in the future," he told Kontan on Thursday (9/3).

Meanwhile, Bank Jatim (BJTM) will propose a dividend distribution for the 2022 fiscal year of IDR 53.08 per share. Bank Jatim CEO Busrul Iman said that the dividend proposal is 1.8% higher than the dividend value in 2022.

Budi Frensidy, Professor of Finance and Capital Markets at UI, said that BJBR and BJTM are known for being generous in providing relatively high dividend yields.