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Indonesia's Bank BRISyariah seeks to grow Shariah financing after IPO

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Indonesia's Bank BRISyariah seeks to grow Shariah financing after IPO

Indonesia-based PT Bank BRISyariah plans to use the bulk of proceeds raised from its IPO to expand its Shariah-compliant financing operations, The Jakarta Post reported May 11.

The Islamic bank debuted on the Indonesian bourse on May 9 after raising 1.33 trillion rupiah in its IPO. Shares of the bank closed at 545 rupiah per share on the debut day, up 6.86% from the IPO price of 510 rupiah per share, according to the report.

Bank BRISyariah is a unit of PT Bank Rakyat Indonesia (Persero) Tbk.

The bank plans to grow financing by 17% in 2018, Bank BRISyariah President Director Moch. Hadi Santoso told the publication. Based on the Islamic bank's double-digit financing growth target and proceeds of the IPO, the could become a BUKU III category bank by the end of 2018, said Haru Koesmahargyo, finance director of Bank Rakyat Indonesia (Persero).

In Indonesia, banks are classified into four categories based on the size of their core capital. Banks with core capital of between 5 trillion rupiah and 30 trillion rupiah fall under the BUKU III category.

Around 80% of the funds raised in the IPO will be used to increase Shariah financing, 12.5% will go toward Bank BRISyariah's IT development, and 7.5% will be allocated to the bank's network expansion.

PT Bahana Sekuritas, PT CLSA Sekuritas Indonesia, PT Danareksa Sekuritas and PT Indo Premier Sekuritas were joint lead underwriters for the IPO.

As of May 11, US$1 was equivalent to 13,980 Indonesian rupiah.