BBRI - Gold Bank business at Pegadaian

BBRI - Gold Bank business at Pegadaian Bank Rakyat Indonesia (BBRI) revealed steps to strengthen its bullion or gold bank business within the company. BRI President Director Sunarso explained that the bullion services scheme was initiated since he served as the President Director of Pegadaian in 2017. Pegadaian has a gold specialist business unit called Galeri 24, which later developed into a separate entity. He continued, the bullion services will later include gold production, gold savings, gold deposits, and financing in the form of precious metals. Sunarso emphasized that gold-backed credit will be accessible to a wide range of customers, from individuals to larger enterprises, mirroring the accessibility of existing gold deposit services. He highlighted that this initiative will expand the definition of 'deposits,' allowing customers to deposit gold, such as 20 grams, as an alternative to traditional monetary deposits. This will also include the option of gold savings accounts. (Source : Bisnis Indonesia) Comment : BBRI's initiative to strengthen its bullion business represents a significant strategic move. Leveraging its experience with Pegadaian, particularly the successful development of "Galeri 24," BBRI aims to capitalize on the growing demand for gold-related financial services. The introduction of gold-backed financing has the potential to significantly expand the bank's lending portfolio while offering customers a valuable alternative to traditional credit products. Moreover, the ability to accept gold as a form of deposit can attract new customer segments and diversify BBRI's funding sources. This move aligns with the evolving financial landscape and the growing demand for alternative investment options, particularly in precious metals like gold. By embracing these new opportunities, BBRI aims to enhance its competitiveness, strengthen its customer relationships, and contribute to the growth of the Indonesian gold market. Maintain BUY, GGM-TP IDR5,960 (2.6x ‘25F P/B).