Sumitomo Mitsui Said to Weigh Bid for TPG’s Indonesian Bank

(Updates with shares in the eighth paragraph.)

March 12 (Bloomberg) -- Sumitomo Mitsui Financial Group Inc. has discussed a potential purchase of TPG Capital’s $1.7 billion stake in Indonesia’s PT Bank Tabungan Pensiunan Nasional, said a person with knowledge of the matter.

Sumitomo Mitsui Banking Corp., the lending unit of Japan’s second-biggest bank by market value, isn’t currently in formal negotiations with TPG, said the person, who asked not to be identified because the information is private. TPG has been approached by other lenders including Japan’s Mitsubishi UFJ Financial Group Inc., people with knowledge of the matter said earlier this month.

Japan’s three biggest banks, including Mizuho Financial Group Inc., have signaled they may accelerate overseas takeovers to counter sluggish loan growth at home. Sumitomo Mitsui President Koichi Miyata in December identified Southeast Asia as a potential area for acquisitions.

Sohei Nishimaki, a spokesman for Sumitomo Mitsui in Tokyo, declined to comment. Siobhan Zheng, an outside spokeswoman for TPG, didn’t immediately return calls and an e-mail.

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 28.6 trillion rupiah ($2.9 billion), and TPG owns about 58 percent, data compiled by Bloomberg show.

Profit Jumps

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 in the lender.

Decades of deflation and on-off economic contraction has damped credit demand and hurt loan profitability in Japan, prompting the nation’s so-called megabanks to look to abroad for growth.

Shares of Sumitomo Mitsui fell 1 percent to 4,100 yen at the close of trading in Tokyo. Indonesian markets were closed for a national holiday today. BTPN slipped 0.5 percent to 4,900 rupiah in Jakarta yesterday.

Sumitomo Mitsui has made an offer for Rabobank Groep’s Indonesian unit, a person with knowledge of the situation said on Feb. 21. The bid followed the bank’s agreement in December to pay HK$3.3 billion ($425 million) to double its stake in Bank of East Asia Ltd., Hong Kong’s largest family-run lender, to 9.5 percent.

In 2007, Sumitomo Mitsui bought 15 percent of Vietnam Export-Import Commercial Joint Stock Bank, known as Eximbank, for $225 million. Its larger domestic rival Mitsubishi UFJ in December sealed a 15.5 trillion dong ($740 million) deal to buy a stake in VietinBank, or Vietnam Joint Stock Commercial Bank for Industry and Trade.

--With assistance from Joyce Koh in Singapore. Editors: Philip Lagerkranser, Mohammed Hadi