RHB notes that the bank’s largest shareholder is the Gunawan family with a 46% stake. The family is reportedly open to selling a portion of its stake as well.
Panin Bank was founded in 1971 by the Gunawan family and listed in 1982. In the past decade, ANZ has expressed its desire to sell its stake but valuation was a stumbling block.
To this end, the team at RHB highlights that Panin Bank has done well this year, rising 61% on expectations of a change in major shareholder. Consequently, the stock currently trades at 0.9x September P/BV — not particularly cheap for a bank that posted 9M2024 return on equity of 6% (annualised). They point out that a 1x P/BV would translate to a market capitalisation of $4.4 billion.
Panin Bank is a mid-sized bank with total assets of $19.4 billion. Its 9M2024 patmi fell 9% y-o-y on weaker net interest income (NII) and non-II.
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“An OCBC-Panin Bank combination would lift the enlarged group to fifth position (from OCBC’s eighth place currently) while a DBS-Panin Bank entity would propel DBS into the top 10 versus its high-teens ranking,” the analysts add.
Assuming a 100% acquisition of Panin Bank, the impact to FY2025 patmi for DBS and OCBC would be 2%-3%. The impact could be smaller, given uncertainties surrounding the Gunawan family’s plans for its stake, the analysts note.
RHB remains “overweight” on the banking sector, with a “buy” call on DBS and “neutral” call on OCBC. Their target prices are $44.70 and $16.80 respectively.
