Impending Merger amongst State-owned Islamic Banks will Strengthen Indonesia’s Shariah Sector: Fitch Ratings

Fitch Ratings (Fitch) explains that the impending merger between three Shariah-compliant banks in Indonesia have the capacity to form a Shariah-banking giant that can compete effectively with other large conventional banks.

The three banks, PT Bank BRISyariah Tbk, PT Bank Syariah Mandiri and PT Bank BNI Syariah, are state-owned subsidiaries of three of the four largest banks in Indonesia.

According to Fitch, Indonesia’s Shariah industry contributes just 6.0% to the country’s overall banking system assets, remaining a small segment of the banking industry. The merger set for the first quarter of 2021 aims to consolidate Indonesia’s Islamic banking sector and a successful transaction wou...