MUFG's growing control will tame Danamon's risk appetite

The Japanese megabank wins approval to up stake in Indonesian consumer lender to 40%. Greater access to Japan’s solidly respectable corporates via MUFG will improve Danamon’s credit worthiness.

Indonesia’s financial services watchdog has granted approval for MUFG’s core commercial banking subsidiary MUFG Bank to raise its investment in Bank Danamon Indonesia to 40% from 19.99%, another step towards solid respectability for the Indonesian consumer lender.

MUFG will acquire an additional 20.1% from Singaporean sovereign wealth fund Temasek. This is the second step in MUFG’s bid for control of Danamon, according to the plan it outlined on December 26.

MUFG hopes to keep raising its holding to over 73.8% of the Indonesian lender if The Financial Services Authority of Indonesia OJK continues to look favourably on the takeover.

MUFG Bank...

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