Mitsubishi UFJ Said to Approach TPG About Indonesia Bank

Mitsubishi UFJ Financial Group Inc. is among banks considering a purchase of TPG Capital’s $1.6 billion stake in Indonesia’s PT Bank Tabungan Pensiunan Nasional, two people with knowledge of the matter said.

Bank of Tokyo-Mitsubishi UFJ, a unit of Japan’s largest publicly traded lender, has sounded TPG out on its plans for the stake, though the companies aren’t in formal talks, said the people, who asked not to be identified because the deliberations are private. TPG, which first invested in BTPN in 2007, hasn’t decided what to do with the holding and is considering options including a public offering of the shares, one person said.

BTPN rose 3.8 percent to 4,825 rupiah in Jakarta trading today, its biggest gain since December. The lender boosted its return on equity to 30 percent last year, making it the second-most profitable Indonesian bank on that basis, according to data compiled by Bloomberg.

“BTPN is a very attractive bank,” said Jovent Giovanny, Jakarta-based analyst at PT Indo Premier Securities. “TPG has brought a lot of value to the bank.”

Any potential acquirer may wait until after regulators rule on a $6.8 billion takeover of PT Bank Danamon Indonesia by Singapore’s DBS Group Holdings Ltd., one person familiar with the matter said. That acquisition, the largest of an Indonesian lender, was announced in April 2012 and has been delayed amid the release of new rules that restrict foreign bank ownership.

Japan Deals

A purchase of TPG’s entire stake in BTPN would mark the largest investment in an Indonesian bank since the Bank Danamon bid, the data show. Japanese companies, seeking access to faster-growing markets, have announced at least $16.4 billion of acquisitions in Southeast Asia in the past five years, data compiled by Bloomberg show.

Other lenders from Japan and Southeast Asian countries including Indonesia have also expressed interest in the stake, one person said without identifying the companies. BTPN shares have advanced 38 percent in the past year. TPG may not immediately exit the investment, this person said.

“Japanese megabanks are looking closely at Indonesian banks and searching for investment opportunities,” Yoshinobu Yamada, a Tokyo-based analyst at Deutsche Bank AG. “The middle class is growing in the country, and lending demand, particularly for car loans, is expected to increase rapidly.”

Yuji Okumura, a Tokyo-based spokesman for Mitsubishi UFJ, declined to comment on its interest in BTPN. Siobhan Zheng, an outside spokeswoman for TPG, couldn’t immediately be reached.

Stock Rally

Fort Worth, Texas-based TPG, which manages $55 billion of capital, and its Indonesian partner Northstar Pacific Partners bought 71.6 percent of BTPN in May 2007, data compiled by Bloomberg show. Less than a year later, BTPN raised 763.7 billion rupiah, or about $83 million at the time, in an initial public offering in Jakarta, the data show.

Originally a lender to retired civil servants, BTPN has rallied almost 10-fold since its first day of trading on March 14, 2008. The company has a market value of 28.5 trillion rupiah ($2.9 billion).

BTPN, with 19,000 employees and more than 1,000 branches, boosted profit 41 percent to 1.98 trillion rupiah last year, data compiled by Bloomberg show. Earnings have jumped more than fivefold since 2008, the first full year after TPG made its initial investment.

Any lender seeking to buy more than 40 percent of an Indonesian bank must meet capital adequacy requirements and be committed for a “certain period of time,” according to regulations released in July by the nation’s central bank. The acquirer also needs to show good corporate governance for three consecutive assessment periods over a five-year span, the bank said, without specifying the length of each period.

(Updates with BTPN closing price in third paragraph.)
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