BBTN - Officially, will acquire Bank Victoria Syariah

BBTN - Officially, will acquire Bank Victoria Syariah Bank Tabungan Negara (BBTN) officially announced the plan to acquire Bank Victoria Syariah. This marks the initial step for BTN to phase out their Islamic banking business. Based on the prospectus published by KONTAN (January 20), BTN will take over 100% of the shares in Bank Victoria Syariah. The nominal value is IDR1.06 tn. Currently, Victoria Investama (VICO) is the majority shareholder of Bank Victoria Syariah with 80.18%. The remaining shares are held by Bank Victoria International (BVIC) with 19.81% and Balai Harta Peninggalan (BHP) Jakarta with 0.002%. As is known, BTN's goal in this corporate action is to smooth the way for its plan to establish a general sharia bank through an inorganic strategy. Where BTN Syariah will be integrated with Bank Victoria Syariah. (Source : Kontan) Comment : BTN's primary objective is to streamline its Islamic banking operations. By acquiring Bank Victoria Syariah, BTN aims to consolidate its existing Islamic banking unit (BTN Syariah) within a dedicated entity. This consolidation will likely enhance operational efficiency, improve resource allocation, and potentially unlock greater synergies within the Islamic banking segment. BTN's acquisition of Bank Victoria Syariah appears to be a strategic move aimed at strengthening its position in the Indonesian Islamic banking market. While challenges and uncertainties exist, the potential benefits of consolidation, inorganic growth, and enhanced market position make this a potentially significant development for BTN and the Islamic banking sector in Indonesia. Maintain our BUY callfor BBTN with GGM-based TP of IDR1,770 (0.5x ‘245 P/B).