Record M&As among Southeast Asian banks expected this year

Over US$20 billion M&As in the pipeline with more coming.

The amount of active and expected bank M&As in Southeast Asia this year could be in excess of US$20 billion, surpassing the record of US$16.9 billion set in 2001, said some analysts.

Driving the M&A surge are U.S. and European investors opting out of high-value stakes; Asian investors looking to expand abroad and a regional banking market that remains underdeveloped despite rapid economic growth in some SEA countries.

An M&A banker said there is now a willingness on the seller's part to realise value and buyers can justify the price more easily because of the fundamentals involved.

James Ankers, co-Head of Financial Institutions in Asia at Rothschild, said SEA offers such tremendous growth potential and is a natural place for banks from Japan, Australia, South Korea and China to invest.

"It makes sense for them to make this region their first port of call."

High on the list of M&As deals is Rabobank whose Indonesian unit is being sought after by heavyweights Industrial and Commercial Bank of China, Commonwealth Bank of Australia and Qatar National Bank.

All three are expected to submit preliminary bids to buy the Indonesian branch in a US$400 million deal. First-round bids are due by the end of January.

Other M&A targets include Indonesian lender Bank Tabungan Pensiunan Nasional Tbk Pt (BTPN). U.S. conglomerate General Electric is in the process of selling its remaining 25.3% stake in Thai lender, Bank of Ayudhya. Japan's biggest bank, Mitsubishi UFJ Financial Group, is among the banks interested in buying GE's stake,