Elements of Consideration and Strategy in Making Decisions on Islamic Commercial Bank Public Shares Issuance

Abstract

This study aim to formulate the dominant element and sub-elements of strenght, weakness, opportunity, threat (SWOT) and the strategies in increasing funding sources through of public shares issuance in Islamic Commercial Banks (ICB). The research problem related to ICB low market share, 5.94% of national banks in Sept 2018. This is due to the lack of capital and industrial scale. For this reason, the ICB needs to increase external funding sources through the issuance of public shares. From the 13 BUS in Indonesia at Sept 2018, only 3 BUS issuing public shares. In an optimal capital structure, BUS can develop faster and will encourage the growth of the Indonesian Islamic financial industry. This study uses qualitative and quantitative methods by Analytical Network Process (ANP) using primary data sourced from in-depth interviews to explore the knowledge and experience of the ICB emiten expert practitioners. The dominant element of SWOT is strength and followed by opportunity. The dominant sub-elements are owner support (strength), decreasing financial performance (weakness), broad investor base (opportunity), complex emission formality (threat). Public share issuance strategies related to the timing of emissions, value and price of emissions, underwriters, dividend payment policies, and use of the proceeds of emission funds.