President Joko Widodo launched operations of Indonesia's largest Islamic lender on Monday in a move to boost the sharia finance industry in the world's largest Muslim-majority nation.
Bank Syariah Indonesia was formed by merging Islamic banking units of Indonesia's state-lenders BNI Syariah and Bank Syariah Mandiri into BRI Syariah BRIS.JK, combining 240 trillion rupiah ($17.13 billion) in assets and core capital of 22.6 trillion rupiah as of December 2020.
Following the merger, it becomes Indonesia's seventh-biggest lender. "Amid a pandemic crisis, I am pleased that the performance of sharia banking in Indonesia has kept a stable growth," said the president, who is better known as Jokowi, during Monday's launch, noting sharia banks fared better than conventional lenders in 2020 in terms of assets, third-party funds and financing growth. Loans from sharia lenders grew 9.5% year-on-year in 2020 while that of conventional banks contracted 2.41%, data from Indonesia's Financial Service Authority (OJK) showed. The merging process began in March 2020 until the bank received permission from OJK last week. Assets of the country's sharia finance industry reached 1,770.32 trillion rupiah ($126.36 billion) at the end of 2020, according to OJK, a nearly 22% increase from the previous year.
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