The Economic and Social Impact on Banking Merger: A Study on Indonesia State-Owned Islamic Bank Merger

Abstract

This study examines the economic and social impacts of the 2021 merger of three state-owned Islamic banks in Indonesia—Bank Syariah Mandiri, Bank BRI Syariah, and Bank BNI Syariah—into Bank Syariah Indonesia (BSI). The merger aimed to enhance operational efficiency, competitiveness, and the overall financial stability of the Islamic banking sector in Indonesia, serving the growing needs of the Muslim population. The primary research question focuses on how the merger has affected both the financial performance of the banks involved and its broader social implications, particularly regarding financial inclusion and job displacement. The methodology involves a qualitative analysis based on financial reports, academic literature, and market data. The study explores key performance metrics such as capital adequacy, profitability, and operational efficiency, as well as the social effects of the merger on employees and communities. Results indicate that the merger improved efficiency and positioned BSI as a key player in the Islamic finance industry. However, challenges related to integrating different corporate cultures and maintaining Shariah compliance were identified. The study recommends enhancing cultural integration programs, improving operational efficiency, expanding financial inclusion efforts, and continuous performance monitoring to ensure long-term success.