GE is a global leader while Bank of Ayudhya (BAY) has an extensive branch network, Chartsiri said.

"The merger will boost competition in the local banking sector, and we have to prepare for that."

BAY announced last week that GE Capital Asia Pacific had signed a letter of intent to buy a 25-per-cent stake in it.

The deal has to be approved by the Bank of Thailand, however.

Analysts say that GE's expertise in consumer financing will provide a long-term benefit for BAY.

Chartsiri said Bangkok Bank had been preparing itself for the sector's consolidation, which was a global trend that would intensify competition.

Thai commercial banks have tried to boost competitiveness by offering diverse services through subsidiaries.

Chartsiri said Bangkok Bank was not currently looking to link up with a strategic partner but was always open to business partners.

In the auto-loan business, Bangkok Bank has no plan to either establish its own leasing firm or increase its stakes in the three leasing companies it partly owns.

Bangkok Bank holds a 25.88-per-cent stake in BSL Leasing Ltd, 10 per cent in Bangkok Central Leasing Ltd and 10 per cent in Toyota Leasing (Thailand) Ltd.

Chartsiri said expanding the branch network was another way of increasing competitiveness.

Bangkok Bank has 698 branches across the country.

Siam Commercial Bank, the country's third-largest bank, has 710 branches.

Somruedi Banchongduang

The Nation