DBS Leading Race to Buy Controlling Stake in Indonesia’s Panin Bank

DBS Group in Pole Position to Acquire Controlling Stake in Indonesia’s Panin Bank

[SINGAPORE] DBS Group, South-east Asia’s top bank by assets, is the frontrunner to buy a controlling stake in Indonesia’s Panin Bank, three people with knowledge of the matter said.

Competing Bids

The Singapore lender was competing with Malaysia’s CIMB Group in the second round of the bidding process, according to one of the people.

Stake Up for Sale

Roughly 86% of Panin Bank, Indonesia’s 12th largest lender, is up for sale. As of Tuesday’s market close, the combined holding owned by Australia’s ANZ and the Gunawan family was worth US$1.8 billion.

ANZ’s Stake

ANZ, which owns 39% according to LSEG data, has been trying to sell its stake since 2013. The founding Gunawan family is flexible about how much it might sell, and the amount will depend on the offer price, sources have said.

Binding Bids

Binding bids for the stake are due by end-April or early May, subject to market conditions, according to two of the people, who added that the thinking of the bidders could change.

DBS’ Interest

If successful, DBS’ acquisition of the Panin Bank stake would be the first deal under incoming CEO Tan Su Shan.

Tan’s Vision

Tan, who will assume the role on March 28, told Reuters this week that DBS is open to bolt-on acquisitions if they fit strategically, created additional value, and are earnings accretive within an acceptable period of time.

Analysts’ Views

Analysts say the deal would propel DBS, which has a unit in Indonesia, to rank among the country’s top 10 biggest banks.

Panin Bank’s Businesses

Panin Bank’s businesses span consumer financing to private wealth. Singapore’s Oversea-Chinese Banking Corp and Japan’s Sumitomo Mitsui also showed interest in the sale earlier on, sources have said.

Company History

Panin Bank, formally known as Bank Pan Indonesia, was founded by Mu’min Ali Gunawan in 1971 and listed on the Jakarta stock exchange in 1982.

Financial Performance

The bank’s net profit climbed 8.2% to US$165 million last year as interest income rose, and it provisions for bad debt fell.

Market Performance

The bank’s shares have plunged by about a fifth for the year to date, sliding along with other Indonesia stocks and the rupiah as investor jitters over government policy and the country’s fiscal health grow.

Conclusion

DBS Group is in pole position to acquire a controlling stake in Indonesia’s Panin Bank, which could be a strategic move to expand its presence in the country. The deal, if successful, would be the first acquisition under the new CEO, Tan Su Shan.

FAQs

Q: Who is the frontrunner to buy a controlling stake in Panin Bank?
A: DBS Group, South-east Asia’s top bank by assets, is the frontrunner to buy a controlling stake in Panin Bank.

Q: Who is competing with DBS Group in the bidding process?
A: Malaysia’s CIMB Group is competing with DBS Group in the bidding process.

Q: How much is Panin Bank’s stake up for sale?
A: Roughly 86% of Panin Bank’s stake is up for sale.

Q: What is the deadline for binding bids?
A: Binding bids are due by end-April or early May, subject to market conditions.