Siam Commercial Bank (SCB) believes Singapore's Temasek Holdings will not increase its stake in the bank to more than 5-per-cent shareholding, says SCB president and CEO Jada Wattanasiritham.

She was responding to a retail shareholder who asked during an ordinary meeting of the bank's shareholders yesterday whether Temasek would boost its stake.

It was a day during which the SCB trumpeted its growth achievements, claiming to have replaced Kasikornbank as Thailand's third-largest commercial bank in terms of asset size. The bank said the ranking change occurred in January, when its assets reached Bt909 billion, pushing Kasikornbank back to fourth place.

SCB chairman Chirayu Isarangkun na Ayutthaya, said some shareholders had expressed concern the bank would be taken over by Temasek, the Singaporean government's investment arm.

Jada said Temasek held 4.72 per cent of SCB shares. She pointed out that Thailand's law limits individual shareholdings in commercial banks to no more than 5 per cent. However, specific shareholders, including the Finance Ministry and state-owned enterprises, are not subject to that regulation.

"The bank has no plans to increase its registered capital, so we've no need to persuade any shareholders to increase their holdings in the bank," said Jada.

She said Temasek's 4.72-per-cent stake in SCB had been bought from Japanese bank United Financial of Japan (UFJ). The sale was conducted through the stock market, and SCB was not involved.

UFJ sold its entire shareholding of 4.72 per cent of SCB shares to Asia Financial Holdings, a Temasek nominee company, in March 2004.

The bank's foreign shareholding presently stands at 38.4 per cent.

Separately, Chirayu said the SCB has no foreign shareholders with more than 5 per cent of the bank's shares.

"Retail shareholders should not be concerned about the bank being taken over by foreigners, because SCB is quite strong in terms of major shareholders," he said. "The bank is owned by two key shareholders, the Finance Ministry and the Crown Property Bureau, which hold 24 per cent each."

Additionally, Jada said the bank's net profit from this year's first quarter was likely to be down from the previous quarter, due mainly to the tax burden.

However, the bank's operating profit is in good condition, and SCB's loan growth and fee income are both expected to achieve their first-quarter targets.

She said the political turmoil had no affect on the bank's operations in the first quarter, although it would probably have some impact this quarter.

However, the bank has no plans yet to adjust its business targets for the year. The overall economic environment will be considered first.

Somruedi Banchongduang

The Nation