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‘Cultural fit’ favors Japanese, Korean buyers of RI banks
Financial institutions from East Asian countries have more "success stories" in Indonesia than their Western counterparts, analysts say.
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This file photo taken in 2017 shows the Sumitomo Mitsui Financial Group logo on the company’s website. (Shutterstock/Casimiro PT)
T
he Financial Services Authority (OJK) says it has detected a surge in interest among Japanese, South Korean and Singaporean investors in acquiring Indonesian banks.
"Soon, we will announce several mergers and acquisitions [M&As] that will happen this year or early next year," Dian Ediana Rae, who heads the banking supervision division at the OJK, said in a press briefing on July 4.
Analysts believe financial institutions from East Asian countries, especially from the three countries mentioned by the OJK, have more "success stories" in Indonesia than their Western counterparts due to a better "cultural fit".
Over the past five years, Indonesia has seen a rush of Asian banks acquiring local players, such as MUFG, Sumitomo Mitsui and Kookmin Bank, which bought out Bank Danamon, BTPN and Bank Bukopin, respectively. Prior to that, South Korea-based Hana Bank became a majority shareholder of Bank Bintang Manunggal in 2007, while Japan’s J Trust took over Bank Mutiara in 2014.
Experts also expect the arrival of foreign players will push local firms to respond with more innovation, which may result in healthy competition.
Almost all top banks from Japan, South Korea and Singapore now have a presence in Indonesia.
According to a senior faculty member at the Indonesian Banking Development Institute (LPPI), M. Amin Nurdin, the country's banking sector is more appealing than other Asia Pacific markets.
