Jakarta, CNBC Indonesia – The stock price of mini-banks aka BUKU II banks (banks with core capital below Rp 5 trillion), namely PT Bank Neo Commerce Tbk (BBYB) has been moving wildly since the end of last July. The market positively welcomed the approval of Akulaku’s takeover of BBYB as the main controller.
As we all know, Akulaku is fintech lending injected by Ant Financial owned by a Chinese conglomerate whose name is no longer unfamiliar, Jack Ma.
Akulaku officially became the controller of BBYB as stated in the disclosure published on July 29 by the management to the OJK.
To note, BBYB was previously named PT Bank Yudha Bakti Tbk which was controlled by state-owned insurance companies PT Asabri (Persero) and PT Gozco Capital. In the first quarter of 2019, Asabri’s ownership in BBYB shares was still above 20%.
However, Asabri continues to make sales actions so that as of August 9, 2021, its remaining ownership is 5.62%. The selling action was continued by Asabri until the last position, called BBYB’s ownership, was only 0.53% left.
In fact, the day before the takeover was announced, BBYB’s shares were still closed at Rp 545/unit.
Relatively ‘calm’ when compared to its sideways trend since the end of March. However, after the announcement of the change of controller, BBYB’s share price moved wildly and briefly reached a record high globally intraday at Rp 1,965/unit today before closing at Rp 1,830/unit.
This means that in less than a month the capital gains obtained from BBYB shares reached 236%. The wild movement of BBYB’s stock price had made the stock exchange authorities stare at this stock and give a ‘special sign’ labeled UMA (unusual market activity).
Now BBYB shares are controlled by Akulaku, which means it has been included in Jack Ma’s portfolio.
So what is the prospect of BBYB shares going forward under the cold hand of the ? crazy rich China, which is continuously thwarted by its government?
But before that, please note that starting from trading this Wednesday morning BBYB shares were suspended by the IDX due to significant share price movements.
Okay, let’s review.
BBYB has not yet released its second quarter financial report, however, in the first quarter, BBYB recorded a net loss of Rp 50 billion. Meanwhile, assets were recorded at Rp 5.74 trillion with liabilities of Rp 4.67 trillion, bringing the equity to Rp 1 trillion.
However, it should be noted that BBYB’s current equity is certainly more than the figure in the first quarter because BBYB has just completed a corporate rights issue (issuance of new shares) to increase its core capital to above Rp 2 trillion in accordance with OJK orders through the POJK for banking consolidation.
Post-rights issue, BBYB’s capital has the potential to increase up to IDR 250 billion from the fund rights issue that have been collected.
Furthermore, the investor from Akulaku who is the controller of BBYB, Jack Ma is one of the world’s successful businessmen from the Bamboo Curtain country.
This is evident from his success in raising Alibaba, which was originally just an e-commerce business, now it has transformed into a technology conglomerate that is not only in the trading business line but also has other business lines such as cloud computing (cloud computing) and digital entertainment.
Alibaba Group is also aggressively expanding overseas. Through its financial wing, Ant Financial, which is hunting for start-ups to disburse its funding, now Jack Ma’s business footprint has been growing. Some of the famous ones include Lazada based in Singapore and Trendyol E-Commerce in Turkey.
Even different from local digital banks, MyBank has been able to record a net profit with a profitability ratio of return on equity (ROE) reaching 16% above conventional banking which only has an ROE of around 10%.
It was recorded that in 2019 MyBank recorded a net profit of Rp 2.9 trillion and for 2020, it provided a loan target for small-to-medium sized consumers to reach US$ 282 billion with a non-performing loan (NPL) ratio of only 1.3 %.
Akulaku is fintech lending which provides offers to consumers to buy consumer goods through the platform e-commerce with jargon buy now pay later.
Through the Akucicil feature, customers can buy various items such as cellphones on credit. BBYB as a bank will of course distribute its credit. Many banks are now helping to channel their credit through fintech lending. There is a clear synergy between Akulaku and BBYB.
Call it Lazada in the field of e-commerce and J&T Express in the logistics sector.
Just imagine if the partnership between these entities continues to be launched. The digital ecosystem will be increasingly formed and the potential for business monetization will be even faster.
BBYB can channel consumer credit through Akulaku where consumers can buy the desired product through Lazada and use J&T Express logistics services.
At the same time, BBYB can also offer banking products and solutions, especially for transactional services to customers. This can be one of BBYB’s good strategies to get cheap funds from customers which results in a lower Cost of Fund (CoF).
With the middle class consumers who continue to grow and the number of consumer loans is massive, it can be a growth engine that offers high yields.
This strategy mix, if implemented properly and prudently in terms of risk management, will be translated into lucrative profitability as well, of course. This is the prospect of BBYB from a business perspective.
However, the actual movements of Jack Ma and his business vehicles inside and outside China are currently very limited considering his vocal voice against the Chinese government has caused him to be often banned by the government of Chinese President Xi Jinping.
Therefore, the success of the Alibaba Group business empire will largely depend on whether Jack Ma and the Chinese government will be harmonious in the future.
CNBC INDONESIA RESEARCH TEAM