Business

Indonesia’s Panin Group sees no Bank Panin sale this year

April 09, 2012

JAKARTA, April 9 — Indonesia's Panin Group said it does not expect to sell its controlling 46 per cent stake in Bank Pan Indonesia this year because the lender is seeing strong growth, dashing market speculation of a deal.

A move last week by southeast Asia's top lender DBS Group for fellow Indonesian lender Bank Danamon raised talk that Panin could be next in line for a deal, lifting Panin's shares 6 per cent since the bid emerged.

“We haven't thought of selling the bank this year. The growth is still good, capital is strong too,” Panin Group founder Mu'min Ali Gunawan told Reuters today.

The controlling stake in Bank Panin, Indonesia's seventh- largest lender, last year drew interest from European and Asia-Pacific banks, an executive told Reuters in an interview a year ago.

Bank Panin shares closed down 1.1 per cent before the comments were reported, in a wider Jakarta market down 0.3 per cent.

Bids for Bank Panin appear to have not been high enough to justify further talks for a bank that Gunawan said had a capital adequacy ratio of 17 per cent, well above the level required and giving it lending firepower in a G20 economy seen growing at over 6 per cent again this year.

“We studied (a sale) last year, in case someday we wanted to sell it at a certain price,” Gunawan said. “We only wanted to check and see the price.”

Too cheap

Gunawan said he was not impressed by the DBS offer for Danamon, which was made at a 52 per cent premium to the previous stock price or equivalent to around 2.6 times book value, also implying he saw bids for Panin as having been too low.

“Danamon's price is considerably too cheap,” Gunawan said.

The bid by DBS, part-owned by Singapore sovereign investment arm Temasek Holdings, for all of Danamon has raised eyebrows for its $7.2 billion (RM21.6 billion) price tag, though DBS's CEO described it as fair given a high price was expected for a lender in a high-growth emerging market.

But the DBS offer is low on a price-to-book basis compared with deals in recent years for Indonesian banks, which have been reporting annual loan growth of more than 20 per cent in an under-penetrated market in southeast Asia's largest economy.

Malaysia's Maybank purchased Bank International Indonesia for 4.7 times book value, while HSBC in 2008 paid 4.2 times for Indonesia's Bank Ekomomi Raharaja.

Several further prospective bank takeovers in Indonesia, where consolidation is expected among the many small lenders, were put on ice last year after the central bank mooted a rule to impose limits on ownership. Lawmakers have told Reuters they could revive a cap on foreign ownership in a new banking law. — Reuters 

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