The Asian Banker

Jan 09, 2014
Asia Pacific bank M&A transactions totalled $13.9b in 2013

Domestic deals dominated bank merger and acquisition activity in the region in 2013, while intra-regional and inter-regional deals also saw a significant increase.

By Wendy Weng

Asia Pacific has seen a decline in merger and acquisition (M&A) activity in the banking sector over the past two years. Reasons for the drop include a dearth of mega deals, such as the acquisition of Sumitomo Trust & Banking by Chuo Mitsui Trust Holdings for $9.4 billion in Japan in 2011, and a tougher regulatory environment, which led to DBS Group dropping a bid for Bank Danamon Indonesia.

However, Asia Pacific is still more active than other regions in M&A activity. Along with stronger economic growth and an expanding demand for financial services in the region, prospects for Asia Pacific banks’ M&A activity remain robust.

Asia Pacific M&A activity remains higher than other regions

Figure 1. Total bank M&A value in Asia Pacific region (2011-2013)

In 2013, total value of completed bank M&A deals fell 9.2% to $13.86 billion (from $15.27 billion in 2012) – a second consecutive drop, following a 19% decrease in 2012 from $18.83 billion in 2011. The acquisition of BOS International (Australia) by Wesptac Banking Corporation, expected to be closed by end 2013, was finally completed on January 2nd, 2014.

Investors are more open to acquiring minority stakes or assets on a portfolio basis. “In the past many acquiring banks insisted on acquiring a controlling stake, now they find it acceptable to acquire minority stakes, taking into consideration the potential strong growth combined with the limited entry points in most markets across Southeast Asia,” said Patrick Hanna, financial services partner at EY. In 2013, the acquisition of minority stakes accounted for 55% by deal volume, up from 49% in 2012 and 33% in 2011.

In the period under review, domestic deals continued to dominate bank M&A activity in the region, while intra-regional and inter-regional deals also rose.

Among intra-regional and inter-regional…

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Categories: Asia Pacific, Databook, Industry Outlook, Investor Audit, Mergers and Acquisitions
Keywords: Bank Danamon, DBS, Bank of Ayudhya, BTMU, BOS International (Australia), Wesptac, Korea Exchange Bank, Hana Financial Group, Societe Generale, TMB Bank, ING, Wing Hang Bank, Chong Hing Bank

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