December 8, 2014 / 3:10 PM / 4 years ago

Mizuho's talks on stake buy in Indonesian lender Panin stall

TOKYO (Reuters) - Mizuho Financial Group Inc said talks to buy Australia & New Zealand Banking Group’s (ANZ) stake in Indonesian lender Panin have stalled, adding the Japanese bank is considering other opportunities in the Southeast Asian nation.

“(The talks) have taken a slightly backward step,” Mizuho President Yasuhiro Sato said in an interview with Reuters. He did not elaborate on the reasons for the protracted negotiations.

Mizuho had approached ANZ to buy its stake of around 39 percent in PT Bank Pan Indonesia Tbk (Panin), sources previously told Reuters. The stake is now valued around $900 million based on its current share price.

The talks had stalled partly because Mizuho has asked for board seats at Panin, and the Gunawan family, which controls around 46 percent of the Indonesian lender, is unwilling to cede, a person with knowledge of the matter said.

“The Gunawan family is not in a rush to have to increase capital,” said the person, declining to be identified because the information was not public.

Several banks including a Spanish bank and Chinese lenders have previously expressed interest in acquiring a stake in Panin, the person added.

Panin shares have surged around 80 percent so far this year, outperforming the 20 percent gain in the broader Jakarta stock exchange, as investors were attracted to the relatively strong net interest margins of Indonesian banks compared to the region.

Mizuho’s Sato said the bank is also looking for other acquisition opportunities in Indonesia, along with Thailand and the Philippines, as Japan’s second-largest lender seeks to build up its corporate banking operations in Asian emerging markets.

The bank is also exploring Asia’s asset management industry for potential targets, he added.

“For asset management business, we have teamed up with BlackRock, whose product coverage is global, but Asia is the only region not fully covered by BlackRock,” he said. “So, asset management companies with strength in Asian products are our acquisition targets,” he said.

Among Japan’s top three lenders, Mizuho’s acquisition activities have been low key, while Mitsubishi UFJ Financial Group Inc (MUFG) and Sumitomo Mitsui Financial Group Inc (SMFG) spent billions of dollars on overseas assets. MUFG bought a 72 percent stake in Thailand’s Bank of Ayudhya Pcl for $5.31 billion last year.

On organic growth, Sato said the bank would keep the current pace of increase in overseas lending, noting outstanding overseas loans are likely to reach $200 billion within a couple of years from $163 billion at end-September.

Reporting by Taiga Uranaka; Additional reporting by Eveline Danubrata in JAKARTA; Editing by Muralikumar Anantharaman

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