Australia & New Zealand Banking Group (ASX:ANZ) has reopened talks to sell its $1.2bn stake in PT Bank Pan Indonesia (IJ:PNBN). Talks over a potential deal were inhibited for over a year previously, but the talks have since resumed, said Morningstar analyst David Ellis. “Resumption of talks and the likelihood of the stake sale is positive for ANZ. Minority investments are a drain on capital calculations and returns. ANZ has indicated it would either like to own a majority or exit the stakes.” Discussion over the sale began in 2013 with the Japanese company Mizuho Financial Group (TYO:8411). Other potential bidders have also showed an interest in the sale. ANZ currently owns a 39 per cent stake of Panin, which has soared to a $1.23bn value as the Indonesian bank’s share price has surged over 55 per cent in the last 12 months.
The move by the major Australian bank comes from a regulatory ruling from 2013 requiring banks to subtract the value of international minority assets for Tier 1 capital. At the end of September, ANZ had a combined $4.4bn of stock in four Asian financial companies. Its Indonesian shares were valued at $795m at the time. An additional $1bn to capital would raise the Australian bank’s common equity Tier 1 ratio by 35 basis points, according to Mr. Ellis. Shares of PNBN are up 1.96 per cent so far on Thursday. The Financials sector in Australia is facing headwinds on Thursday amid concerns of inflation data and the timing of a cash rate cut. Shares of ANZ are down 18.5c, or .52 per cent, at $35.31 per share around 2:21pm on Thursday. Shares of the Australian bank have advanced 2.05 per cent in the last 12 months and 10 per cent so far this year.
Author: Matthew Dibb
Apr 23, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.