Akulaku-backed Indonesian digital lender Bank Neo Commerce plans to increase its core capital through a rights issue. According to disclosure information available on the Indonesia Stock Exchange (IDX), Bank Neo Commerce will issue 5 billion new shares in the issue.
The pricing and schedule of the rights issue will be decided after obtaining shareholders’ approval on Aug 8, 2023.
The lender had raised 2.5 trillion rupiah through a rights issue in 2021, of which around 2.1 trillion rupiah has been used to meet the core capital requirement of 3 trillion rupiah. It still has 442 billion rupiah left in its kitty.
Last year, it had raised another 1.7 trillion rupiah through a rights issue, but the money is still in its cash flow and will be used for technology development, according to a statement on Monday.
Fintech unicorn Akulaku, as the majority shareholder, has been aggressively building up its stake in Bank Neo Commerce. According to information available on IDX, Akulaku bought 67 million shares of Bank Neo between April 28, 2023, and May 23, 2023, at 560-600 rupiah apiece, increasing its ownership in the bank to 27%.
Lukman Leong, Chief Analyst at DCFX Futures, said Akulaku is likely to add more stake in Bank Neo Commerce as its valuation is very attractive.
Akulaku founder William Li also confirmed earlier that the company plans to enhance its stake in Bank Neo Commerce to over 40%. “The impact of additional shares in Bank Neo Commerce will increase confidence of retail investors in the bank,” Lowis told DealStreetAsia.
Bank Neo Commerce booked losses of 789 billion rupiah ($53.77 million) in 2022, compared with losses of 986.28 billion rupiah in 2021. Impairment costs of 1.07 trillion rupiah and general costs of 943 billion rupiah contributed to the company’s losses last year. Even so, its interest income jumped more than two times to 2.16 trillion rupiah in 2022 from 665.65 billion rupiah in 2021.
Edward Lowis, senior analyst at Sucor Sekuritas, said Bank Neo Commerce is predicted to swing into profit for this year. There are two factors that will contribute to this — interest income that will increase more significantly and lower customer acquisition costs.
According to a statement on Monday, Bank Neo Commerce has appointed Aditya Windarwo as interim CEO, replacing Tjandra Gunawan. Under Windarwo’s leadership, Bank Neo Commerce will focus on serving the SME segment with Neo Bisnis products and provide mutual fund products through Neobank apps.
Bank Neo Commerce has over 20 million customers in Indonesia and provides various products, including QRIS; Neo Bisnis for SMEs; funding and deposit products; digital lending products; mutual funds; and others.