Last year, the Indonesian market regulator amended its bank ownership rules, which puts a cap on single ownership in local banks at 40%, hence it is expected that SMFG will acquire not more than 40% shareholding.
The proposed acquisition will enable the Japanese bank to tap business opportunities in one of the fastest-growing economies of Southeast Asia.
Apart from SMFG, Mitsubishi UFJ Financial Group is also considering acquiring certain interest in BTPN.
In 2008, TPG Capital Management purchased 71.6% stake in the Indonesian pensioners’ savings bank, for a purchase price of $195m, and it is expected that the acquirer will offer seven times more than their original investment.
Ageing Japanese population and shrinking interest has forced Japanese financial firms to explore the profitable market and Southeast Asian countries presents an attractive business destination for them.
In March, several Chinese banks had expressed interest in BTPN and were not willing to pay seven times its book value, which was believed to be the sale price, the Financial Times reported.
Set up in 1958, BTPN trades as a commercial lender with a market value of $3bn and has a workforce of more than 19,000 employees and manages 10,000 branch offices.
