BNI looks to boost Islamic banking business

The fourth largest bank in the world’s largest Muslim country wants to do more Islamic or “Shariah” banking.

Bank Negara Indonesia (BNI) is on the hunt for a partner to do more Shariah banking. Chief Executive Officer Gatot Suwondo said the bank needs a partner who has knowledge in Shariah “. . . and besides that, we have network in Shariah and of course, strong funds to grow our shariah banking.”

"Some of our potential partners for Middle East are approaching us. Looking at partners, you can't do it in one night. You need to know first if their vision is in line or not,” he said.

BNI invested around US$100 million in Shariah banking operations in 2010. In 2011, BNI posted a net profit of US$550 million, up 40% from 2010.

BNI is also looking to add micro-financing to its operations.

"For micro-banking, we can't do it through our BNI because we're not designed for that market,” Gatot said.

“So it's most likely we are going to focus on banks towards that segment. There are 125 banks in Indonesia. And 40 banks out of 125 are controlling the market so there are small banks that we can target."