Japan’s Sumitomo Acquires 40% of Indonesia’s BTPN; The bank is known for serving retired civil servants, but has been expanding into Indonesia’s small businesses market

March 19, 2014 Leave a comment

Japan’s Sumitomo Acquires 40% of BTPN

By Francezka Nangoy on 11:30 pm Mar 14, 2014

Jakarta. Sumitomo Mitsui Banking Corporation, one of Japan’s largest banking groups, has concluded its 40 percent stake acquisition in Indonesia’s Bank Tabungan Pensiunan Nasional.

The Japanese bank bought the remaining 919.27 million shares of the Indonesian pensions bank, which is equivalent to a 15.7 percent stake, it said in a statement released on Friday. The shares were sold at Rp 6,500 (57.2 cents) apiece.

SMCB priced the latest stake purchase at 45 percent more than its Thursday trading price of Rp 4,490. Shares of the lender rose 8 percent to trade at Rp 4,850 at Friday’s closing in Jakarta.

The Japanese bank had already acquired a 24.3 percent stake in BTPN in May last year. The latest deal, valued at roughly $1.5 billion, brings SMBC’s ownership of the Indonesian bank to 40 percent.

SMBC acquired the stocks from Texas Pacific Group, a US investment company.

“Sumitomo Mitsui as a controlling shareholder is expected to bring added value to our business expansions, as SMBC has the expertise and experience that will support BTPN’s growth,” said Jerry Ng, president director of BTPN, in a separate statement on Friday.

BTPN, a mid-size lender, is among 120 commercial lenders operating in Indonesia. It reported a 19 percent growth in lending last year, to an outstanding of Rp 46.11 trillion from Rp 38.84 trillion a year earlier.

Profit at BTPN rose 7.6 percent to Rp 2.13 trillion last year from Rp 1.98 trillion.

The bank is known for serving retired civil servants, but has been expanding into Indonesia’s small businesses market in its efforts to capitalize on the country’s strengthening purchasing power and expanding economy.

The small business segment now makes up 23 percent of BTPN’s loan portfolio.

SMBC has been busily increasing its investments abroad over the past few years. In December 2012, it paid HK$3.3 billion ($425 million) to double its stake in the Bank of East Asia, Hong Kong’s largest family-run bank, to 9.5 percent.

The Japanese bank also took part in buying Royal Bank of Scotland’s aircraft leasing unit for some $7.3 billion in 2012.

Indonesia’s growing economy has attracted a number of overseas companies. Mizuho Financial, another Japanese company, is reportedly in talks with ANZ bank to acquire its 39 percent stake at Bank Pan Indonesia, or Panin Bank.

As the banking industry continues to mature in Japan, the country’s banks are looking for other markets in which to expand. Indonesia’s young population and expanding middle class are often cited as the main attractions for Japanese investors to tap into the archipelago. Last year, Japan surpassed Singapore as Indonesia’s largest source of foreign direct investment. Indonesia’s Investment Coordinating Board reported that Japan contributed 16.5 percent of Indonesia’s Rp 270.4 trillion in foreign direct investment last year.

 

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