ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

In Equity Sales and Research for more than 25 years covering Asian markets. Possesses in-depth knowledge of a wide range of companies, economies, and markets in Asia. Over his career, he has specialised in HK/China and ASEAN markets at various different Investment Banks, most recently heading equities in Indonesia for Bank of America Merrill Lynch in Jakarta for more than three years. Whilst in Jakarta, he produced a well-read daily and weekly product on the Indonesian market, which included company visits, as well as political, economic and sector commentary. A former racing skier, who enjoys ultra-marathons and surfing in his spare time.

ASEAN Insight Provider

Smartkarma Corporate Webinar | Indo Banks: The Worst Is Over

BJBR: Positive Fundamental Momentum at a Decent Valuation

Bank Mandiri Persero (BMRI IJ) - A Stand Out on a Number of Fronts

Bank Mandiri Persero (BMRI IJ) - A Plethora of Good News

Gravity Works As WeWork Doesn't; Now Plan B

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

The recent announcement that the three state-owned Syariah banks including Mandiri Syariah, <a href="https://www.smartkarma.com/entities/bank-brisyariah-tbk-pt" target="_blank" data-smartkarma-citation="entities:26981:1" rel="noopener">Bank Brisyariah (BRIS IJ),</a> and BNI Syariah will merge together to form a new state-owned Syariah entity signals a change of pace in the space. 
It is not surprising that Syariah banking is becoming increasing popular in Indonesia given the fact that the population is nearly 80% Muslim, with the largest population of Muslim in the world.
This is compounded by an increasing trend within society to "be a good Muslim", with the wearing  of Hijabs, the consuming of Halal products, making charitable donations ("Zakat"), pilgrimages to Mecca (Umrah and Hadj), and obviously Islamic Syariah Banking. 
Syariah Banking can be a very profitable business, with an inherently low cost of funds and a different way of collecting "interest" on loans but this is not always the case. 
Syariah lenders such as <a href="https://www.smartkarma.com/entities/bank-tabungan-pensiunan-nasi" target="_blank" data-smartkarma-citation="entities:27088:1" rel="noopener">Bank BTPN Syariah (BTPS IJ)</a> achieve super-normal returns with an ROA above 10% Pre-COVID and Mandiri Syariah (Indonesia's largest Syariah Bank by assets &amp; deposits) achieved an ROE of 15.7% in 2Q2020. 
Other such as <a href="https://www.smartkarma.com/entities/bank-brisyariah-tbk-pt" target="_blank" data-smartkarma-citation="entities:26981:1" rel="noopener">Bank Brisyariah (BRIS IJ)</a> and BNI Syariah are much less profitable, with the former achieving an ROE of only 3%, with the latter close to zero. Even BCA Syariah ( <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a> only achieved an ROE of 4.0% in 2019. 
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Bringing the three SOE Shairya Banks together with Mandiri Syariah as the lead, will bring with it better scale and cost synergies, with targetted ROEs in the mid-teens in the medium-term. Though unconfirmed as yet, it is likely that <a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri (BMRI IJ)</a> will have a controlling interest in the merged entity, which will make it the key beneficiary of growth in the new entity. 
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The recent announcement that the three state-owned Syariah banks including Mandiri Syariah, Bank Brisyariah (BRIS IJ), and BNI Syariah will merge together to form a new state-owned Syariah entity signals a change of pace in the space. 
It is not surprising that Syariah banking is becoming increasing popular in Indonesia given the fact that the population is nearly 80% Muslim, with the largest population of Muslim in the world.
This is compounded by an increasing trend within society to "be a good Muslim", with the wearing  of Hijabs, the consuming of Halal products, making charitable donations ("Zakat"), pilgrimages to Mecca (Umrah and Hadj), and obviously Islamic Syariah Banking. 
Syariah Banking can be a very profitable business, with an inherently low cost of funds and a different way of collecting "interest" on loans but this is not always the case. 
Syariah lenders such as Bank BTPN Syariah (BTPS IJ) achieve super-normal returns with an ROA above 10% Pre-COVID and Mandiri Syariah (Indonesia's largest Syariah Bank by assets &amp; deposits) achieved an ROE of 15.7% in 2Q2020. 
Other such as Bank Brisyariah (BRIS IJ) and BNI Syariah are much less profitable, with the former achieving an ROE of only 3%, with the latter close to zero. Even BCA Syariah ( Bank Central Asia (BBCA IJ) only achieved an ROE of 4.0% in 2019. 

Bringing the three SOE Shairya Banks together with Mandiri Syariah as the lead, will bring with it better scale and cost synergies, with targetted ROEs in the mid-teens in the medium-term. Though unconfirmed as yet, it is likely that Bank Mandiri (BMRI IJ) will have a controlling interest in the merged entity, which will make it the key beneficiary of growth in the new entity. 


Bank Mandiri Persero (BMRI IJ) - The Unsung Hero of Syariah?