(Bloomberg) -- Sumitomo Mitsui Financial Group Inc. is considering a rival bid for PT Bank Pan Indonesia, people familiar with the matter said, amid fierce competition between Japan’s biggest lenders to expand in Southeast Asia’s largest economy.

Sumitomo Mitsui is competing against suitors including bigger rival Mitsubishi UFJ Financial Group Inc. to acquire a controlling stake in the Jakarta-based lender known as Panin Bank, the people said, asking not to be identified because the matter is private. The Tokyo-based firms are among those working with advisers and conducting due diligence as they weigh binding bids, the people said.

Shares in Panin Bank surged 15% after the Bloomberg News report, their largest increase in nearly two months, giving the company a market value of about $2.9 billion. PT Panin Financial shares jumped as much as 12.2%.

While sale considerations are ongoing and no final decision has been made, MUFG is still seen as the strongest contender, the people said. MUFG could propose combining Panin Bank, with its local unit PT Bank Danamon Indonesia as part of the deal, Bloomberg News has reported. Sumitomo Mitsui owns Jakarta-based PT Bank BTPN, which it bought in 2013.

Panin Bank’s biggest shareholders, including the Gunawan family with a 46% stake and Australia and New Zealand Banking Group Ltd. with about 38.8%, are working with their respective financial advisers as they explore a potential sale of their holdings, people familiar with the matter have said. Other regional lenders as well as local investors have also expressed preliminary interest, the people said.

A representative for Panin Bank said the bank respects the rights and decisions of its shareholders and declined to comment further. Representatives for ANZ and Sumitomo Mitsui declined to comment, while a representative for the Gunawan family’s PT Panin Financial didn’t immediately respond to requests for comment.

Japanese lenders have been keen buyers of assets across Asia in recent years as they seek to expand in new markets amid low interest rates and sluggish growth at home. Beyond its interest in Panin Bank, MUFG is in advanced talks to acquire consumer lender Home Credit’s assets in Indonesia and the Philippines, people familiar with the matter have said.

(Updates with shares move in third paragraph.)

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