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Asia-Pacific financial institutions M&A interest tracker

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Asia-Pacific financial institutions M&A interest tracker

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.

Indian financial companies were involved in a number of potential deals in August, as banks consider the divestment of noncore assets.

Bank of Baroda has plans to sell its subsidiaries in Ghana and Trinidad and Tobago as part of efforts to rationalize its overseas operations, Mint reported. The government-run bank is considering the sale of both Bank of Baroda (Ghana) Ltd. and Bank of Baroda (Trinidad and Tobago) Ltd.

The bank has decided to exit from some of its subsidiaries as they have performed below expectations. The move could be the latest in the bank's efforts to shut down some of its overseas offices to conserve capital. Bank of Baroda has closed its Nassau branch in the Bahamas, its Bahrain branch and its Mutrah branch in Oman.

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

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India's public sector banks are looking to shut down or rationalize about 70 overseas offices in the current fiscal year to March 2019, the Press Trust of India reported. The move is part of a broader series of reforms for the banking sector. The Indian government had revealed in January a plan to inject capital into state-owned banks that would be conditional on banks' performance, including selling noncore assets and rationalizing their overseas branches.

Another state-owned lender, State Bank of India, is planning to sell part of its stake in National Stock Exchange of India Ltd. through a secondary sale, according to an Aug. 28 announcement. The bank is in the process of selling up to a 3.9% stake in the stock exchange. The bank had sold a 5% stake in the stock exchange in July 2016.

Meanwhile, Bandhan Bank Ltd. is looking at acquiring a stake in PNB Housing Finance Ltd., The Economic Times reported. The bank reportedly has held preliminary discussions with PNB Housing Finance. The lender is expected to make a stock offer or a combination of cash and stock over a pure cash bid. The bank joins other interested parties such as Kotak Mahindra Bank Ltd. and Housing Development Finance Corp. Ltd. in vying for stakes held by Punjab National Bank and Carlyle Group LP in the housing finance firm. Both companies previously said they were selling at least a 51% stake in the unit.

New York-based Warburg Pincus LLC is in talks for a minority stake in India-based Fusion Microfinance for an estimated price of US$80 million to US$100 million, The Economic Times reported. The private equity firm would acquire a stake in the nonbanking financial firm from the latter's existing shareholders.

In the insurance sector, Hong Kong-based FWD Group is acquiring HSBC Holdings PLC's 49% stake in a Malaysian insurance joint venture, Reuters reported. FWD Group plans to eventually take a majority stake in HSBC Amanah Takaful (Malaysia) Bhd. by acquiring shares from current holders. The transaction is expected to be completed by the end of 2018.

Further, China-based conglomerate Fosun International Ltd. is also interested in making insurance deals. Kang Lan, board director and senior vice president at Fosun International and chairwoman of Fosun Insurance Group, told S&P Global Market Intelligence that the company is always interested in insurance M&A opportunities, noting that the company's focus is on Europe. Fosun is also looking at North America and emerging markets such as Indonesia and India.

While Fosun is looking at snapping up insurance opportunities, Aegon NV is considering exiting its Japanese joint venture, AEGON Sony Life Insurance Co. Ltd., due to tough market conditions. CEO Alex Wynaendts told analysts on a conference call discussing Aegon's first-half earnings that the low interest rate environment in Japan led to a tough sales environment, which has "prevented Aegon Sony Life from reaching the necessary scale to make it a viable business." Aegon is considering all options for the joint venture, including a possible exit.

Further articles about other deal possibilities

Report: Pershing Securities starts strategic review of Australian, NZ operations

Report: Abu Dhabi sovereign fund to sell shares in RHB Bank

Kakao mulls larger stake in internet-only lender KakaoBank

Report: IIFL Holdings unit in talks to buy Indian wealth manager