TEMPO.CO, Jakarta - The share prices of three state-owned banks, Bank Mandiri, BNI and BRI took a free fall on Monday's trade, October 7. One of the reasons for these corrections was news that the rescue plan for Bank Muamalat will be executed by state banks.
At the Indonesia Stock Exchange, Monday, Bank Mandiri (BMRI) lost 0.78 percent, BNI fell 2.91 percent, and BRI 1.27 percent.
Trimegah Sekuritas Indonesia's analysts Sebastian Tobing and Rifina Rahisa said in their research that market participants are worried that the three banks would buy securities assets of Muamalat Bank. Based on their calculations, the Islamic bank needs funds up to Rp20.6 trillion.
If the three banks inject funds based on their equity, Mandiri would spend Rp6.9 trillion, BRI Rp7.1 trillion, and BNI Rp4.2 trillion.
Sebastian and Rifina said the corporate act may reduce the amount of dividend received by shareholders.
"Taking into account the investment returns from the purchase of these assets, it is reasonable to assume that investors will reduce the book value of each bank's shares by the purchase value of these assets," the research said.
Samuel Sekuritas Indonesia's chief researcher Suria Dharma said state banks will face negative effects if they try to bail Muamalat, even though their cash flow and assets are abundant.
"Helping a problematic institution will give the rescuers negative effects," he said.
Meanwhile, Bank Mandiri corporate secretary Rohan Nafas denied the rumor, saying the bank has no plan to help with Bank Muamalat's capital. "We, as well as other Himbara banks, have no intention of entering Muamalat Bank," he said.
Meanwhile, Bank Muamalat's corporate secretary Hayunaji neither confirmed nor denied that rumor. He said the company is currently waiting for new investors and that the due diligence process has been started by domestic and foreign institutions. He did not mention the investors' name, citing confidentiality.
Bank Muamalat has been dealing with bad loans. After the 1998 economic crisis, their non-performing loan ratio reached more than 60 percent with a loss of Rp105 billion. The bank survived after the Islamic Development Bank (IDB) injected funds.
The company collapsed again in 2015 when it needed fresh funds that shareholders could not provide. Meanwhile, IDB was restricted by an internal rules that prohibit shares placements exceeding 20 percent. As a result, Bank Muamalat's capital adequacy ratio (CAR) fell 11.58 percent two years later.