WeLab Acquires Indonesian Bank for HKD 4 Billion to Launch Digital Bank and Target Young Customers.
May 4, 2023
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Simon Loong, founder and group CEO of WeLab. (Photo courtesy of WeLab)
WeLab, a financial technology group, has completed the acquisition of Jakarta-based PT Bank Jasa Jakarta (BJJ) for approximately HKD 4 billion (USD 500 million) from Indonesian-listed company, PT Astra International Tbk. The acquisition is the largest digital bank acquisition in Southeast Asia this year, and WeLab and Astra plan to transform BJJ into a new and innovative digital bank in Indonesia.
WeLab’s Founder and Group CEO, Simon Loong, hopes that the new digital bank will be operational by the first half of next year, and aims to attract at least one million customers within the first 12 months of operation, with a plan to achieve break-even within 3 to 5 years.
The acquisition has been approved by the Indonesian Financial Services Authority, and was jointly participated by WeLab’s consortium, WeLab Sky Limited, and Astra subsidiary, PT Sedaya Multi Investama. WeLab Sky received support from new and existing investors, including Allianz X, Creditease Holdings, Vistra, SCBX Group, and Taipei Fubon Bank Capital.
BJJ has 11 branches and primarily serves small and medium-sized enterprises. Loong stated that the bank has a 40-year history and only a small number of individual customers. WeLab and Astra will retain the existing BJJ network while developing the digital bank. Loong believes that the digital bank will be able to provide easy access to financial services, promote inclusive finance, and capitalize on the untapped market of young consumers in Indonesia with a familiarity with digital technology.
Loong said that WeLab’s new digital bank will first target young consumers in Indonesia’s first and second-tier cities, who are familiar with digital services and have diversified income streams. He expects the bank’s products to include GoSave deposits and GoWealth intelligent financial advisory services. Loong also suggested that WeLab Bank’s existing products, such as GoSave and GoWealth, could be introduced to the new digital bank in Indonesia.
Regarding BJJ’s 11 branches, Loong suggested that they could be used to serve the young customers who will be attracted to the new digital bank. He mentioned that some banks in Indonesia have transformed their branches into experiential spaces located in shopping malls that resemble retail stores.
WeLab Bank and WeLend currently have a combined total of approximately 500,000 users, and WeLab Bank’s net interest income in the first half of this year was 10 times higher than that in the second half of last year. Loong reiterated his belief that WeLab Bank’s losses had peaked last year.
The acquisition of BJJ demonstrates WeLab’s commitment to expanding its presence in Southeast Asia’s digital banking sector. With the backing of new and existing investors, WeLab is set to capitalize on the untapped market of young Indonesian consumers who are familiar with digital technology and have diversified income streams.