JAKARTA -- Japanese megabank Sumitomo Mitsui Banking Corp. is one of two final contenders to acquire major Indonesian peer Bank Permata, a senior official at Indonesia's Financial Services Authority said Friday.
"Sumitomo Mitsui and a Thai investor remain in the race," the official said. "Sumitomo Mitsui is in serious consideration."
Indonesia is accelerating the reorganization of its financial industry through mergers and acquisitions. Japanese banks such as SMBC -- part of Sumitomo Mitsui Financial Group -- are especially keen to take advantage of this opportunity.
MUFG Bank raised its stake in Bank Danamon Indonesia and made it a consolidated subsidiary in April. Earlier this year, SMBC acquired Bank Tabungan Pensiunan Nasional, creating Indonesia's 10th-largest bank by total assets. The deal let SMBC offer a wide variety of financial services in the country.
Indonesia is Southeast Asia's most populous nation at more than 260 million. But penetration of bank accounts languishes in the 30% range, creating ample room for growth.
Standard Chartered Bank and Indonesian group Astra International each own 45% of Bank Permata. State-owned Bank Mandiri and Singapore's DBS Bank previously showed interest in the acquisition.
As Japanese banks expand abroad, Mitsubishi UFJ Financial Group -- to which MUFG belongs -- is set to become the country's first megabank to generate half of its profits abroad. Amid ultralow interest rates at home, acquisitions like the Bank of Ayudhya of Thailand and Union Bank of the U.S. are starting to contribute to profits.