TOKYO -- Japanese financial institutions Bank of Yokohama and Daido Life Insurance will take stakes in Indonesia's Bank Resona Perdania, which is partially owned by compatriot Resona Bank, positioning themselves to help client companies expand into Southeast Asia's most-populous country.
Bank of Yokohama will acquire a 30% stake while Daido Life Insurance will buy roughly 15% of the shares. At the same time, Resona Bank will raise its 43% ownership to about 48% in a deal to be signed on Monday, making the bank more than 90%-Japanese owned.
With the middle-class rapidly expanding in Indonesia, steady economic growth is expected down the road. The move could spur other regional players to buy into overseas lenders as they struggle for a path to survival amid shrinking demand at home.
The transaction, the value of which has not been disclosed, is expected to be completed by the end of March. The shares will be acquired in part from a subsidiary of Hong Kong's Bank of East Asia.
Perdania mainly serves Indonesian small and midsize companies as well as Japanese corporations that do business in the country.
More small and midsize Japanese companies are moving into Indonesia to try to capture demand in an economy growing by over 5% a year. While many Japanese regional banks enter into partnerships with emerging-market lenders to support their clients' overseas expansion, few go so far as forming capital ties.
Bank of Yokohama's Indonesian investment follows a move this summer by MUFG Bank, Japan's biggest lender, to double its stake in Bank Danamon.
Bank of Yokohama, part of Tokyo-based Concordia Financial Group, will gain representation on Perdania's board and management team.