Japanese lenders vie for Bank Panin stake

TOKYO • Mitsubishi UFJ Financial Group has entered the running for a 39 per cent stake in Bank Pan Indonesia, people with knowledge of the matter said, potentially setting up a battle between two of Japan's largest banks.

Japan's biggest lender Mitsubishi UFJ and its competitor, Mizuho Financial Group, are among shortlisted bidders for Australia & New Zealand Banking Group's (ANZ's) holding in Jakarta-based Bank Panin, according to the sources, who asked not to be identified as the information is private. 

Taiwan's CTBC Financial Holding and Fubon Financial Holding were also invited to submit second-round offers for the stake, which is worth about 8.84 trillion rupiah (S$884 million) at the current share price, the sources said.

Any bidder would need to overcome an impasse with Bank Panin's controlling Gunawan family, whose reluctance to give a board seat to an incoming investor has stymied on-and-off negotiations with Mizuho since 2013.

Japanese banks are looking for growth in Indonesia, the world's fourth-most-populous nation, to help counter an ageing population back home and declining lending profits.

The first-round offers received by ANZ valued Bank Panin at less than two times its net assets, two of the sources said, far lower than for comparable banking deals in Indonesia. 

Private equity firm CVC Capital Partners also reportedly submitted a first-round offer for the Bank Panin stake.

Mr Jun Watanabe, a spokesman for Mitsubishi UFJ, and Ms Masako Shiono, a spokesman for Mizuho, declined to comment. Representatives for ANZ, Bank Panin, CVC, Fubon and CTBC declined to comment.

ANZ is seeking to sell the stake in Bank Panin after Australian regulators introduced rules in 2013 requiring banks to subtract the entire value of overseas minority investments from Tier 1 capital.

Since the beginning of August, the Melbourne-based lender has raised A$3.2 billion (S$3.2 billion) selling shares as it seeks to shore up capital.

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A version of this article appeared in the print edition of The Straits Times on October 27, 2015, with the headline 'Japanese lenders vie for Bank Panin stake'. Print Edition | Subscribe