New SCIB chief to oversee merger with BankThai
Chulakorn Singhakowin, former president of the now-defunct Bank of Asia, is likely to be appointed as president of Siam City Bank (SCIB) by the end of next month. His main mission will be to merge the mid-sized institution with BankThai.
According to a source close to the deal, Chulakorn - who is also a former chairman of the Thai Bankers Association - submitted his application for the job on Thursday and is likely to be appointed by the SCIB board "soon". Arun Chirachavala, former president of SCIB, earlier resigned from the post. Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula is also strongly supporting Chulakorn to step into the bank in order to consolidate SCIB with BankThai, the source said. "If we leave it [SCIB] like this further, there might be damage," he said. "With solid capital, SCIB can merge with BankThai, which is considered low-capital. The small bank has not been so profitable and its franchise network is too small. This would be a good consolidation," he said. However, the first task of Chulakorn in SCIB would be to build up his team in the bank. Then he may have to take some time to boost the bank's profitability to make its balance sheet more attractive. SCIB is quite strong in its capital base, while the bank's ratio of non-performing loans to total loans is a low 2.66 per cent. Earlier, an official from the Bank of Thailand denied a report that SCIB was to be merged into TMB Bank, saying both institutions were able to stand on their own. The official said yesterday that even though TMB has large retained losses, it did not need a merger to reduce the loss. That comment was in line with the view of an analyst at Phatra Securities, who said that if SCIB and TMB Bank merged, the consolidated bank's picture would remain "unclear". Each bank's strong point is also not that clear. As a result, the prospect of the merger deal would not lead to significant benefits to the two banks for the long term, the analyst said. SCIB chairman Sompol Kiatphaibool said the Bank of Thailand and the Finance Institutions Development Fund, the bank's major shareholders, had not informed it about any merger between TMB Bank and SCIB. SCIB announced net profit of Bt3.36 billion for the first nine months, down from Bt4.58 billion in the same period last year. BankThai announced a net loss for the first nine month of Bt703.24 million, compared to a net profit of Bt555.75 million in the same period last year.
Jiwamol Kanoksilp, Somruedi Banchongduang The Nation
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