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Asia-Pacific financial institutions M&A interest tracker


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Asia-Pacific financial institutions M&A interest tracker

Editor's note: This tracker covers possible deals reported by media across the Asia-Pacific region over a certain period. The information is gathered from various news sources, excludes confirmed deals and is limited to potential acquisitions or sales involving companies or operations in the region. Click here to read the previous month's article.

Potential bank deals were a major focus in March as several stakes in Southeast Asian banks could be open to potential buyers, while the Pakistani and Indian governments moved to sell their stakes in banks.

Meanwhile, Myanmar's Kanbawza Bank Ltd. and Thailand's Islamic Bank of Thailand are looking for new investors, while Korea Deposit Insurance Corp. may sell its stake in Cambodia's Tomato Specialized Bank.

Below is a snapshot of March reports of possible deals compiled by S&P Global Market Intelligence.

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Kanbawza Bank is willing to sell a stake to a foreign lender if the country's laws on foreign ownership are loosened, Bloomberg News reported March 13, citing Nang Kham Noung, an executive director at the bank. Myanmar's government is looking to attract more foreign investment through measures including a revised companies law that will allow overseas investors to acquire up to a 35% stake in local companies.

Islamic Bank of Thailand plans to sell a 74.5% stake in the bank. The struggling lender will approach 35 investors for a potential sale, the Bangkok Post reported March 14, citing Chaiwat Utaiwan, the bank's chairman. The Thai lender is struggling with a large amount of bad debt, which amounts to half of its total loans.

Korea Deposit Insurance is looking to sell its 62% stake in Cambodia's Tomato Specialized Bank to find a partner to help the bank meet regulatory capital requirements, The Phnom Penh Post reported March 14. The deposit insurer will attempt to sell its stake in the bank in the first half through a bidding process, said Gwak Bumgook, CEO of Korea Deposit Insurance. The remaining 38% stake in the bank will stay with local shareholders.

In other rumored bank deals in Southeast Asia, Malaysia's Bank Kerjasama Rakyat Malaysia Bhd. denied it was the target of a potential takeover after a media report stated that the lender may be up for sale as part of Bank Negara Malaysia's plan to consolidate the financial sector.

The bank said the report was incorrect and that there were no such plans, The Malaysian Reserve reported March 14.

Also in Malaysia, AMMB Holdings Bhd. and RHB Bank Bhd. are reportedly eyeing a merger once again, with key shareholders of both banks in preliminary discussions about the matter, The Edge reported March 20. A large accounting company has been working on certain aspects of a possible merger, a source said. Discussions are still in the early stages and have not yet come to a point where the banks are asking the central bank to start official talks.

Merger rumors between the two banks have been around since 2015. At the time, The Edge had reported that the two companies had held "high-level talks" for AMMB to be merged into the then-RHB Capital.

In South Korea, KB Financial Group Inc. unit KB Securities Co. Ltd. plans to sell its savings bank unit Hyundai Savings Bank Co., an official from KB Securities' strategy and planning department told S&P Global Market Intelligence March 2.

It will be the second time KB Financial has attempted to sell Hyundai Savings Bank. The company's first attempt fell through in 2016.

Meanwhile, the Indian government is said to be looking to offload part of its stakes in Axis Bank Ltd. and IDBI Bank Ltd. The government is expected to sell part of its stake in Axis Bank through a new exchange-traded fund in 2017, Bloomberg News reported March 23.

Such a move would mark the first time the government uses a fund that will hold equity in private-sector companies rather than state-controlled ones.

While the government may push ahead with its sale of a stake in Axis Bank, it may delay its planned sale of a partial stake in IDBI Bank to fiscal 2018, CNBC TV 18 reported March 9, citing sources. The government may further delay its plan to get a better offer. The government has been trying to lower its stake in the bank since 2016.

Pakistan's government has received interest from multiple investors for its 93.88% stake in SME Bank Ltd., The News International reported March 31. At least 10 investors have expressed interest in acquiring the stake.

The sale process is likely to be completed by June 30, a source said.

In the insurance space, Suncorp Group Ltd. will decide as early as April whether it will proceed with a sale of its life insurance operations, The Australian Financial Review reported March 20. Sources have suggested that several industry players were not enthusiastic about the Suncorp life division as it required a turnaround and had pulled back from the distribution channel.

India's Bank of Baroda is said to be considering reducing its stake in its insurance and asset management joint ventures, Bloomberg News reported March 22. The Indian lender may cut its 44% and 49% stake in IndiaFirst Life Insurance Co. and Baroda Pioneer Asset Management Co., respectively, sources said.

ICICI Lombard General Insurance Co. Ltd. has already shortlisted three private equity firms to acquire a 35% stake in the insurer, The Economic Times reported March 28, citing "people familiar with the development." The deal is expected to fetch up to US$1 billion, the sources said. The shortlisted companies — Warburg Pincus LLC, Carlyle Group LP and Temasek Holdings (Pvt) Ltd. — will now conduct a final round of due diligence and submit binding offers by the end of April.

In addition, Japan's Nippon Life Insurance Co. plans to spend ¥500 billion on mergers and acquisitions over the four years to March 2021, The Nikkei reported March 17. The insurer has sought growth through M&A amid Japan's shrinking population, stagnant economy and low interest rates.

To read articles about other deal possibilities, click on the following headlines:

Report: Up to five bidders vie for South Korea's eBEST INVESTMENT SECURITIES

Report: Singapore Exchange eyes tie-ups with overseas operators

Report: CIMB Group considering acquisition of Jupiter Securities

Report: ANZ Vietnam to sell retail business

Yuanta, Taishin Financial decline to comment on Ta Chong Securities deal rumor

Report: Kotak Mahindra Bank may acquire Mahindra & Mahindra Financial Services

Report: Deutsche Bank may sell Indian retail biz

Report: IndusInd, Bharat Financial in advanced talks for potential merger

Report: Punjab National Bank to sell 7% stake in PNB Housing Finance

Report: Aviva mulls sale of Friends Provident International