Research

M&A In The Digital Banking Sector?

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Algo Research Team

Industry | Dec 13, 2023 | Views: 217

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Key Summary:

  • M&A overview in the financial industry
  • Fintech/Digibank needs M&A
  • Who are the potential candidates?

The Indonesian banking industry continues to consolidate as tightening competition, higher regulatory capital requirement and need for cost-efficiency incentivize M&A between the small-mid sized banks and larger banks. The industry is also more encouraged to consolidate as the top 10 banks control significant market share, leaving less room for the others to compete.


In 2023, it has been a busy year for M&A for conventional banks where recently we had NISP which bought 99% stake in Commonwealth bank for ID2.2tn (USD140mn), implying a relatively low multiple of 0.5x PBV. There is also BDMN that is expected to finalize its purchase of Standard Chartered Bank's consumer portfolio amounting to IDR1tn, while a similar move was also made by UOB that has completed the acquisition of Citibank Indonesia consumer business.

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