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Penguatan Perbankan Syari’ah melalui Merger atau Konsolidasi
[Strengthening Sharia Banking through Merger or Consolidation]

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  • Nizar, Muhammad Afdi

Abstract

This research aims to : (i) examine the need to merge sharia banks in an effort to encourage the improvement and performance of sharia banking in Indonesia; (ii) review policy options for merging sharia banks owned by state-owned banks to become a separate SOE bank with a merger or consolidation pattern; and (iii) estimate the amount of State Capital Participation (PMN) in a merged bank (BUMN). The results of this study indicate that: (i) merging is one way to realize the formation of a large Islamic bank, provided there are independent controlling shareholders; (ii) merger or consolidation patterns have insignificant different effects on the economic, strategic, financial, risk and other aspects. Significant effects on the choice of merger or consolidation scheme are expected in terms of legality and conflict of interest between human resources (HR) originating from or from different backgrounds; and (iii) merging sharia banks requires large funds and high risk. Merging can be done more easily at Islamic banks that have a special relationship with the Government and are in the form of entities, namely Bank Syariah Mandiri, BRI Sharia, and BNI Sharia. This study recommends that: (i) the formation of new banks in the presence of state capital and (ii) the equity participation of conventional parent banks is maintained, only not in the position of controlling shareholder.

Suggested Citation

  • Nizar, Muhammad Afdi, 2016. "Penguatan Perbankan Syari’ah melalui Merger atau Konsolidasi [Strengthening Sharia Banking through Merger or Consolidation]," MPRA Paper 97964, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97964
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    References listed on IDEAS

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    More about this item

    Keywords

    added value valuation method; dual banking system; consolidation; merger; syari’ah banking; state capital participation;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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