Cathay Financial Holding Co (國泰金控) yesterday said that it would bolster its presence in Southeast Asia by participating in a capital increase plan by an investee in Indonesia.

The company said that its biggest subsidiary, Cathay Life Insurance Co (國泰人壽), would invest 401 billion rupiah (US$29.97 million) in PT Bank Mayapada Internasional Tbk’s 1 trillion rupiah capital increase plan, which is to be completed in the second half of this year.

Cathay Life, which has acquired a 40 percent stake in the Indonesian lender since 2015, said that the investment would prevent dilution of its stake as Bank Mayapada issues new shares.

Bank Mayapada has maintained robust annual growth of about 25 percent in deposits and lending from 2014 to last year, the nation’s biggest insurer said, adding that the lender’s net interest margin has averaged about 4.82 percent.

The Indonesian lender posted an annualized return on equity of 13.86 percent in the first quarter of this year, significantly outpacing Taiwanese banks, Cathay Life said.

Following the capital increase, Bank Mayapada’s capital adequacy ratio is expected to rise from 12.5 percent to 14.3 percent, the insurer said.

Cathay Life acquired a 24.9 percent stake in Bank Mayapada in 2015 and expanded its holding by 15.1 percent last year.

With its 40 percent stake, the Taiwanese insurer is the second-largest shareholder in the Indonesian bank and is eligible to appoint two board directors and one board supervisor.

Cathay Life said that it has reached the limit on foreign investment set by Indonesian regulators.