JAKARTA (TheInsiderStories) – Indonesian lender PT Bank Mandiri Tbk (IDX: BMRI) and Japan’ Mizuho Bank are considered as the potential buyers to acquire Standard Chartered PLC (Stanchard) shares in PT Bank Permata Tbk (IDX: BNLI), as part of the bank’ refreshed strategic priorities to improve the profitability, said one research today.
PT RHB Sekuritas in its latest research on Feb. 27, assumed the statement of the Biritish lender’ showed a signal of selling about 44.56 percent the ownership in BNLI.
The securities house also noted, there is a possibility of another shareholder which is PT Astra International Tbk (IDX: ASII) might also be open to the possibility of selling its shares of 44.5 percent in Bank Permata, especially post its decision to buy back 25 percent stake of its unit’ PT Astra Sedaya Finance from the bank in 2018.
Similarly, it would take a long time as well for Astra to break even its investment in Bank Permata, which represents an opportunity cost.
“We view Astra as having more synergy with its multifinance subsidiaries than Permata to support its auto business,” the report said.
RHB Sekuritas also sees other potential buyers from Japanese or state-owned banks. Two of the recent notable merger and axquisitions in Indonesia came from Japanese banks SMBC in PT Bank Tabungan Pensiunan Nasional Tbk (IDX: BTPN) and MUFG in PT Bank Danamon Tbk (IDX: BDMN). Mizuho is the only other Japanese banks operating in Indonesia, which has not purchased a local bank so far.
Mizuho was also been looking to purchase Australian ANZ’ stake in PT Bank Panin Tbk (IDX: PNBN) during 2013-2015, but was subsequently cancelled according. With Bank Panin having similar characteristics as Bank Permata this would make it an ideal candidate for Mizuho.
Furthermore, SOEs banks such as Bank Mandiri said that it is looking for a mid-sized bank with a focus in SME and to grow its funding base. Mandiri has also said it has excess capital to finance M&A, without the need for external funding.
On the other hand, Director of Astra International Suparno Djasmin denied to comment about Standard Chartered’ statement and also the company’ stake in BNLI. Indonesia Financial Service Authority also has not received the permission or official information from the Standard Chartered regarding with this matter.
Previously, American investment company Farallon Capital Management L.L.C. is reportedly seeking to buy a 44.6 percent stake in local lender Bank Permata from U.K’s Standard Chartered PLC, local media reported. Before Farallon, local tycon Tahir–who’s owned PT Bank Mayapada Tbk (IDX: MAYA)–has shown its interest to buy the bank’s shares.
Bank Permata is jointly owned by Stanchard and local conglomerate firm Astra with ownership of 44.56 percent each, while the remaining 10.88 percent is owned by the public. In purchases in 2004 and 2006, both parties jointly bought a total of 89 percent of Permata for US$548 million.
Apart from owning some stake in Bank Permata, the British’ bank also has local a local branch operating in Indonesia. Stanchard has incurred heavy losses in the country from writing off large exposures to heavily indebted clients, such as Indonesian businessman Samin Tan, the owner of PT Borneo Lumbung Energy Tbk (IDX: BORN) with total amount $1 billion.
The situation is increasingly urgent as Bank Permata slumped to a loss last year after a big increase in loan loss provisions in the fourth quarter pushed bad debts up to 14 per cent of its total loan book. This resulted in a $215m loss for Stanchard.
Bank Permata is the result of a merger five banks, PT Bank Bali Tbk, PT Bank Universal Tbk, PT Bank Prima Express, PT Bank Artamedia and PT Bank Patriot in 2002. The bank with branded name Permata Bank has aspirations to become a leading financial services provider Indonesia, with a focus on consumer and commercial segment.
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