Sentiments were welcomed on the Indonesia Stock Exchange, with Bank Jago's shares moving 'wild' ever since, particularly after - near the end of 2020 - ride hailing tech startup Gojek (Indonesia's first, and so far only, Decacorn) invested in Bank Jago by becoming a shareholder. It was a development that made the market believe that Bank Jago is set to become the digital bank where the funds of Gopay users are managed (Gopay being the electronic wallet service of Gojek).

Shareholders Bank Jago:

Shareholders Percent
PT Metamorfosis Ekosistem Indonesia 37.65%
Wealth Track Technology Limited 13.35%
PT Dompet Karya Anak Bangsa 22.16%
Masyarakat Umum 26.84%

Source: Bursa Efek Indonesia (BEI)

In mid-February 2021, this relatively small bank had grown into the ranks of big cap stocks (namely shares with a market capitalization higher than IDR 100 trillion, or approx. USD $7 billion) on the Indonesia Stock Exchange, with a market cap of IDR 103 trillion. And its future looks even brighter after the Singapore government's investment agency, Government of Singapore Investment Corporation Pte Ltd (GIC), is also preparing to become a shareholder of Bank Jago in the first quarter of 2021. GIC has stated that it is committed to absorb a portion of Bank Jago's new shares, which will be issued through a rights issue, by injecting funds of around Rp 3.15 trillion.

Share Performance Bank Jago Over the Past 12 Months:

Currently, the share price of PT Bank Jago Tbk is in the range of Rp. 9,500 - Rp. 10,500, a level that is quite premium actually if you look at the level of the benchmark index (Jakarta Composite Index), which is only around 6,200. This premium price level could be triggered because the bank indeed has great potential, but it could also be the case that investors have excessive expectations as Bank Jago has become labelled a 'digital bank' (the bank of the future). What is clear, is that the value of Bank Jago's shares now exceed those of the BUKU III and BUKU IV category banks, with the only exception being the shares of Bank Central Asia (which currently trade around Rp 33,000).

Bank Jago-Gopay Relationship

How the relationship of Bank Jago and Gopay will be in the future, has never been disclosed to the public. However, as a fintech company, Gopay, which is not a bank, can basically not expand its services any further. Despite its limitations, Gopay, which has only been operating for 5 years, has reached around 200 districts/cities across Indonesia. Gojek also claimed that transactions via Gopay reached around Rp. 170 trillion in full-year 2020.

Imagine if Jago Bank would become the entrance for Gopay to expand its services network - such as for fund transfers or providing credit for the micro, small and medium enterprises (MSMEs).

Head of Corporate Communications at Gopay, Winny Triswandhani, once said that the total number of Gopay merchants reached more than 500,000 merchants, around 95 percent of which are MSMEs. On the other hand, the potential for third party funds looks promising with 38 million active customers using the Gojek application. If these active users top-up their Gopay balance, let's say IDR 500,000 per month, then -at least- Gopay can count on IDR 19 trillion each month.

Then what's in it for Bank Jago? Given that this bank is intended to be a digital bank its collaboration with Gopay will facilitate its metamorphosis through technology transfer. If this scheme is used, of course, it will be a win-win solution for both.

Writer: Elizabet Siregar