Japan' Sumitomo Mitsui Financial Group (SMFG) (8316.T) become a preferred bidder to acquire around 90 percent shares of local lender, PT Bank Permata Tbk (IDX: BNLI) - Photo by the Company

JAKARTA (TheInsiderStories)  – Japan’ Sumitomo Mitsui Financial Group (SMFG) (8316.T) and Bangkok Bank become a preferred bidder to acquire around 90 percent shares of local lender, PT Bank Permata Tbk (IDX: BNLI), from British’ Standard Chartered Bank (Stanchard) and PT Astra International Tbk (IDX: ASII), said the source close to the deal.

The financial company has beat its two key rivals, Singapore’ DBS Group Holdings Ltd., and Oversea-Chinese Banking Corp., to buy the US$1.9 billion-valued bank. No further comment from the parties about the development of the acquisition program.

But last February, Stanchard said that investment in Bank Permata was not a priority for the company and gave a signal to sell its shares. But no reasoned why Astra also wants to sell their parts at the bank.

Recently, member of board of commissioners of the Financial Services Authority (FSA), Heru Kristiyana, admitted that the two existing shareholders would relinquish its ownership in Bank Permata. He said, many local and foreign parties from Japan, Singapore and Thailand has joined the bidding of the 12.49 billion shares. The remaining 3.04 billion shares or 10.88 percent owned by public.

If SMCB successfully acquires Bank Permata, then the Japan’ lender has the potential to merge the bank with a local bank that has already been acquired, namely PT Bank Tabungan Pensiunan Nasional Tbk (IDX: BTPN). If Bank Permata merge with BTPN, then the merged bank has the potential to become a Book IV category with core capital of over Rp30 trillion ($2.14 billion).

Previously, beside the foreign bank, PT Bank Mandiri Tbk (IDX: BMRI) had been rumored interested to acquire Bank Permata. However, this was canceled because there was no agreement on the selling price between the two controlling shareholders.

In addition to the state-owned lender, two Japanese financial institutions are also reportedly interested in acquiring Bank Permata. The two institutions are Mizuho Financial Group and Sumitomo Mitsui Financial Group.

The lender is eyeing profit of Rp2 trillion in 2020 from this year target Rp1 trillion. As of September 2019, the bank announced net profit of Rp1.1 trillion, up 121 percent on an annual basis. This was contributed by an increase in net interest income by 3.0 percent and operating income other than interest by 22 percent.

US$1: Rp14,000

by Linda Silaen, Email: linda.silaen@theinsiderstories.com