Panin Bank acquisition could boost DBS, OCBC profits

A full acquisition could increase fiscal year 2025 PATMI by 2% to 3%.

Several banks, including DBS, OCBC, Malaysian, and Japanese institutions, are reportedly interested in acquiring Bank Pan Indonesia (Panin Bank), which could potentially boost profits, RHB said.

A full acquisition of Panin Bank could increase DBS's or OCBC's fiscal year 2025 PATMI by 2% to 3%, though the impact could be smaller depending on the Gunawan family’s final decision regarding their stake. 

An OCBC-Panin Bank merger would elevate the combined entity to fifth spot amongst relevant banking groups, whilst a DBS-Panin Bank merger would place DBS within the top 10.

ANZ Group Holdings is offering its 38.8% stake in the Indonesian bank, and the Gunawan family, Panin Bank’s largest shareholder with a 46% stake, may also sell a portion of its holdings. 

Panin Bank’s annualised return on equity (ROE) for the nine months of 2024 (9M 2024) was 6%, and its 9M 2024 profit after tax and minority interests (PATMI) decreased 9% year-on-year due to weaker net interest income (NII) and non-interest income. 

With total assets of S$19.4b, Panin Bank’s size is considered a key attraction, RHB said.