Middle East Investors Mulls Investing in Sharia-Compliant Bank BSI
Jakarta. Bank Syariah Indonesia (BSI) is currently in talks with potential Middle Eastern investors as the former seeks expansion to Saudi Arabia, according to a minister.
BSI is the result of a merger between the state-owned BRI Syariah, Bank Syariah Mandiri, and BNI Syariah. BSI today is trying to set up a branch in Saudi Arabia after it secured a full license in the United Arab Emirates (UAE). State-Owned Enterprise (SOE) Minister Erick Thohir said that Indonesian representatives had been touring Middle Eastern countries --namely Saudi Arabia, Qatar, and the UAE-- to attract investors to BSI.
“During our roadshow, there were talks about investing in BSI, but they [the potential investors] wanted a [stake of] over 10 percent. This is higher than we offer, which is between 10 and 11 percent,” Erick told reporters in Jakarta on Tuesday.
Erick did not go into detail about which potential investor wanted a larger portion than what Indonesia offered at the time.
“They [the potential investor] asked if we could give them a 15-20 percent stake so they could become a strategic partner. But this is something that the shareholders Mandiri, BRI, and BNI need to discuss among themselves,” Erick said.
According to Erick, Indonesia has also been persuading Saudi Arabia to grant BSI a full license. He added: “But it is up to them [Saudi Arabia] whether to issue the license.”
Mandiri is currently BSI’s majority shareholder as it owns a 51.47 percent stake. Followed by BNI (23.24 percent) and BRI (15.38 percent), BSI’s official website shows.
News agency Bisnis reported in Nov. 2023 that the bank would likely open up a branch in Saudi Arabia by Q2-2024. BSI said that it already had discussions with the Saudi Arabian Monetary Authority (SAMA).
The UAE office marked the first time BSI grew its footprint overseas since its merger in 2021. On the UAE expansion, BSI started out with a representative office in Dubai, which eventually grew into a full branch office after it secured a license. The recently earned license opens up opportunities for BSI to conduct transactions related to export-import, among others.
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