Business

Japan's biggest lender buys 73.8% of Indonesian bank from Temasek

JAKARTA Mitsubishi UFJ Financial Group (MUFG) said it was cautiously optimistic of gaining regulatory approval for its plans to take majority control of PT Bank Danamon Indonesia - a deal that sent shares in the South-east Asian lender surging.

Japan's biggest lender, eager to expand its presence in Indonesia, has agreed with Temasek Holdings, Singapore's state investment arm, to buy 73.8 per cent of the bank in three stages.

The first part of the acquisition - a purchase of a 19.9 per cent stake worth US$1.2 billion (S$1.6 billion) - is due to be completed within days.

Eventually, it aims to buy all the shares in the country's fifth-largest bank.

Any purchase of a stake of 40 per cent or more will, however, exceed the maximum allowed by Indonesia's financial services regulator OJK, although the watchdog has the power to grant exceptions.

CAUTIOUSLY OPTIMISTIC

Takayoshi Futae, MUFG's chief executive for Asia and Oceania, said the Japanese bank was in continuous discussions with OJK and was "cautiously optimistic" it would gain approval to take more than 40 per cent.

He did not elaborate further.

Danamon's shares jumped 15 per cent in yesterday's trade to 6,900 rupiah (S$0.68) per share. - REUTERS

BUSINESS & FINANCE