Major Southeast Asian Banks Compete for Panin Bank’s Controlling Shares

JAKARTA, RAKYAT NEWS – The sale of controlling shares in Bank Pan Indonesia Tbk (Panin Bank) is attracting the attention of major players in Southeast Asia’s financial sector. Prominent banks, Oversea-Chinese Banking Corporation (OCBC) of Singapore and CIMB of Malaysia, are now competing to gain control of Panin Bank.

Both OCBC and CIMB have submitted non-binding offers for the combined shares held by two main shareholders of Panin Bank: 39.22% owned by Australia and New Zealand Banking Group (ANZ) and 46.52% held by the Gunawan family, the founding family of the bank since 1971. The sale of these shares is not only strategically significant but also financially impactful, with an estimated combined value of over IDR 37 trillion (approximately USD 2.4 billion), based on Panin Bank’s recent closing share price of IDR 1,900 per share.

The interest in Panin Bank has caused its stock price to surge, rising nearly 5.73% during trading on December 10. By the end of that session, the shares were trading at IDR 2,030. The deadline for the non-binding offers is expected to fall later this month, with the sale process first reported in October.

Aside from OCBC and CIMB, other major financial institutions, including Malaysia’s Malayan Banking Bhd (Maybank), are reportedly working with advisors to prepare potential offers. Japanese banks, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corp, are also said to be expressing interest in the Panin Bank shares.

Panin Bank’s diverse portfolio, which includes consumer financing and wealth management services, has made it an attractive target for large financial institutions looking to capitalize on Indonesia’s strong economic growth, the largest in Southeast Asia. In 2024, Panin Bank’s shares have increased by 58.3%, bringing the bank’s total market value to USD 2.84 billion.

From a valuation perspective, Panin Bank is trading at a price-to-book ratio of 0.88, comparable to other banks like CIMB Niaga (0.88) and Permata Bank (0.86), but higher than OCBC NISP (0.78) and Maybank Indonesia (0.56).

ANZ’s decision to sell its stake in Panin Bank is not a new development. The Australian bank has sought to exit its investment since 2013, with valuation challenges being the main obstacle. ANZ originally acquired a 29% stake in Panin Bank in 1999, later increasing it to 39.22%. Under CEO Shayne Elliott, ANZ has shifted its focus toward its domestic market, reducing its exposure in Asia to strengthen its local operations and increase its return on equity.

Panin Bank, established in 1971 by influential entrepreneur Mu’min Ali Gunawan, went public in 1982.

Despite the sale, the Gunawan family, now led by 85-year-old Mu’min Ali Gunawan, is expected to retain a portion of their shares in the bank.
Panin Bank reported an 8.16% decline in net profit for 2023, reaching IDR 3.01 trillion, primarily due to a reduction in net interest income.(Uki Ruknuddin)