Bank Jatim's Regional Banking Consolidation Efforts Continue

Capital Injection Strategy

Bank Jatim has made significant capital injections into two regional banks: Bank Lampung and Bank Sulawesi Tenggara (Bank Sultra), with each receiving Rp100 billion. This move is part of the bank's strategy to form a Banking Business Group (KUB) as mandated by OJK Regulation No.12/POJK.03/2020. The capital injections were executed on November 10 and 11, 2025, and have been approved by shareholders and the Financial Services Authority (OJK).

Analyst Insights

Industry expert Moch. Amin Nurdin suggests that while the consolidation is a positive direction, its immediate impact on Bank Jatim's financial performance will be limited. The primary motivation is seen as preventing smaller BPDs from being downgraded to BPR status rather than a strategic business move that will immediately enhance financial performance. Amin highlights that regional ego and differing banking systems pose significant challenges to the consolidation process.

Challenges Ahead

The consolidation process is expected to be lengthy due to the need to harmonize different banking products and systems. Amin emphasizes that the true test for BPDs lies in their ability to expand credit to the real sector and invest in technology and digitalization. While the consolidated financial reports may show improved capital adequacy, the actual performance enhancement will take time.

Future Prospects

Despite the challenges, the formation of KUB is viewed as a positive policy direction. For larger BPDs with strong capital backing from their respective governors (as shareholders), this consolidation could lead to improved performance. The key will be comprehensive implementation rather than just focusing on capital requirements.