Akulaku-backed lender Bank Neo Commerce plans to raise 3 trillion rupees ($191 million) through a rights issue next year to support its loan disbursement targets and launch several new products, according to an announcement on Wednesday. .
Tjandra Gunawan, Chief Executive Officer and CEO of Bank Neo Commerce, said existing investor Alibaba Group will participate in the rights issue. However, the Chinese tech giant – through its Akulaku and Rockcore Financial Technology entities – can only increase its stake in Bank Neo Commerce up to 40%, as foreign entities are allowed to hold a maximum stake of 40%. % in an Indonesian bank.
Currently, Akulaku owns 25.39% of the shares of Bank Neo, PT Gozco Capital 14.13%, Yellow Brick Enterprise 5.17%, Rockcore Financial Technology 6.12% and the public 48.24%.
Following the rights issue, Akulaku’s stake will increase to 29.03%, Gozco Capital’s to 16.76% and Rockcore Financial Technology’s to 6.93%. On the other hand, the participation of Yellow Brick Enterprises will be reduced to 4.58% and that of the public to 42.71%.
As a result, Alibaba’s stake in Bank Neo Commerce will increase to 35.96% after the capital increase from 31.51% currently.
During an interaction with DealStreetAsia earlier, Akulaku CEO and Founder William Li said the company plans to increase its stake to over 40% in Bank Neo Commerce.
The lender, meanwhile, has scaled back its initial target of raising Rs 5 trillion in capital. “We had planned to raise 5 trillion rupees, but the market situation does not support it,” Gunawan told reporters on Wednesday.
The rights issue will increase the capital of Bank Neo Commerce to Rs 4.2 trillion, exceeding the minimum requirement of regulator OJK of Rs. 3 trillion.
With funding from the capital increase, Bank Neo Commerce plans to launch performing lending products in the first quarter of 2023. “We have about 20 users, and some of them are also small businesses; so we will support them with digital lending features,” he said.
It will also launch a wealth management feature on its app in the first half of 2023 to sell mutual funds. With this new feature, Gunawan hopes the bank will get new revenue streams.
Currently, Bank Neo Commerce provides digital lending products to retail consumers and also collaborates with around 25 fintech players.
The new features will help Bank Neo Commerce return to profit next year, Gunawan said. In the nine months of 2022, the lender recorded losses of Rs 601.2 billion, a doubling from Rs 264.74 billion in the same period of 2021. Its loan disbursements, however, jumped 131.77% to 8.9 trillion rupees from 3.84 trillion rupees during the same period.
“Our net result in 2022 has improved; we can register profits from June 2022 to September 2022. But for the whole year 2022, we will probably still register losses,” Gunawan explained.