Sumitomo Mitsui Banking Corp of Japan is in discussion to purchase a US$1.3 billion or GBP837.8 million share in BTPN, the Indonesian bank backed by TPG Capital. This was confirmed by sources familiar with the transaction.

The purchase helped increase BTPN's share values by 9% in the Indonesian bourse. 

This is just another example of Japan's continued expansion into Indonesia's fast growing financial services industry. The sale would also be another example of a US private equity investor reaping massive profit from early investments made in an Asian banking institution.

TPG Capital Management LP purchased 71.6% stake in the savings bank formally named as Bank Tabungan Pensiunan Nasional Tbk PT for about US$195 million back in 2008. After an IPO in 2010, TPG's stake fell to 58.5%.

SMBC is the third biggest financial institution in Japan in terms of assets and is a subsidiary of Sumitomo Mitsui Financial Group Inc. The negotiations are under the advisement of the new foreign ownership limits in banks instituted in Indonesia.