Japanese banks have been keen on acquisition of assets in Asia due to tepid growth in domestic market. Credit: Jasmin777 from Pixabay.

Sumitomo Mitsui Financial Group has joined the fray to acquire controlling stake in PT Bank Pan Indonesia (Panin Bank), Bloomberg reported, citing people familiar with the matter.

The firm is competing against firms including Mitsubishi UFJ Financial Group for the acquisition of the stake in the Jakarta-based lender, the sources added.

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The Japanese firms are among those working with advisers and carrying out due diligence as they consider binding bids, the sources added.

Sale considerations are continuing and currently, no final decision has been taken. MUFG is continued to be seen as the strongest contender for the deal, the people said.

As part of the deal, MUFG may propose bringing together Panin Bank, with its own local unit PT Bank Danamon Indonesia.

Sumitomo Mitsui bought Jakarta-based PT Bank Tabungan Pensiunan Nasional (BTPN) in 2013.

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Panin Bank’s major shareholders include the Gunawan family that holds a 46% stake and Australia and New Zealand Banking Group with 38.8% interest. These shareholders are working with their financial advisers as they weigh a potential sale of their stakes, people familiar with the matter have said.

Other regional banks as well as investors have shown preliminary interest, the sources added.

However, representatives of Panin Bank,  ANZ, Sumitomo Mitsui, Gunawan family’s PT Panin Financial did not respond to requests for comment, reported Bloomberg.

Japanese banks have been keen on acquisition of assets in Asia over recent years as they intend to branch out to new markets amid low-interest rates and tepid growth in the domestic market.

Meanwhile, MUFG is also holding advanced negotiations to buy consumer lender Home Credit’s assets in Indonesia and the Philippines, sources aware of the matter said.