Sumitomo Mitsui Financial Group (SMFG) is mulling a rival bid for PT Bank Pan Indonesia (Panin Bank) as competition heats up between Japan’s major Banks to expand in Southeast Asia’s largest economy.

Sumitomo Mitsui is competing against major rival Mitsubishi UFJ Financial Group (MUFG) to acquire a controlling stake in the Jakarta-based lender, requesting not to be identified because the matter is private. MUFG is also holding advanced negotiations to acquire consumer lender Home Credit’s assets in Indonesia and the Philippines.

SMFG completed the purchase of PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) in 2013, demonstrating its commitment to the key market for the Japanese lender.

Panin Bank’s major shareholders include the Gunawan family and ANZ with both shareholders consulting their financial advisers as they weigh a potential sale of their stakes. SMFG has been eager to purchase a stake in a commercial bank in Indonesia for some time as Japanese banks struggle with ultra-low interest rates domestically, forcing SMFG and others to seek opportunities outside Japan, particularly in Southeast Asia as it seeks to expand its business in markets including the Philippines, Vietnam and India.

That impulse was heightened after the group lost out to Thailand’s Bangkok Bank in bidding for Permata, which had a strong client base of SMEs and middle-income retail customers. The group has less flexibility in its merger and acquisition (M&A) strategy in the United States, as its banking arm was ordered last year by the US Federal Reserve to improve anti-money laundering (AML) measures.

“There will be no significant changes in strategy in Asia even after the COVID-19 outbreak. We still expect the region to show stronger economic growth” SMFG CEO Jun Ohta previous stated in 2020.