TMB Bank will propose its official recapitalisation plan to the Finance Ministry in March, though it has yet to finalise the details, chief executive officer Subhak Siwaraksa said yesterday.

He said the bank had not yet completed all the details, so he was unable to comment on earlier news reports that TMB needs additional capital of Bt35 billion.

Singapore-based DBS Bank, one of TMB's major shareholders, has not informed the bank about whether it will increase its shareholding from the current 16 per cent.

Under the capital-increase plan, the bank aims to raise its capital adequacy ratio from 10.4 per cent to 12 per cent. Subhak declined to estimate the amount of capital needed, saying it depends on several factors including the bank's operating profits, reduction of non-performing loans (NPLs), and loan expansion.

According to the plan, the bank intends to wipe out retained losses by reducing its stock's par value, which would not impact on shareholders except the Finance Ministry, which is the bank's preferred shareholder. TMB's preferred shares will be converted to common shares in 2010.

TMB's four major shareholders are the Finance Ministry, DBS Bank, the Royal Thai Army and Thai Life Insurance Group, holding 31.1 per cent, 16.1 per cent, 5 per cent and one to 2 per cent of the shares, respectively.

It was reported earlier that Subhak would be replaced as TMB's CEO by Chulakorn Singhakowin, former president of the now-defunct Bank of Asia.

Subhak commented yesterday that Chulakorn was more likely to be the bank's director and executive chairman - replacing Sommai Phasee, who resigned recently.

One bank director position is also vacant as Sirote Swasdipanich also resigned recently. It was earlier reported that Chitraporn Tangsuvarn would be appointed to replace Sirote.

The two vacancies are expected to be filled within one month, Subhak said.

"I'm just one bank employee, I'm not the bank's owner. Thus, my position depends on the shareholders' decision, but I believe that I have done my best here. As a professional, I'm not worked up about the issue," he added.

Subhak also said the bank targeted to decrease distressed loans from about 7 per cent of TMB's total credit portfolio to 5 per cent by the end of the year, by selling the bank's NPLs. Last month, the bank sold about Bt9 billion of its NPLs, which now stand at Bt47 billion.

"The bank has to decrease bad loans by Bt20 billion to meet the target on NPL reduction to 5 per cent this year. Our new loans will increase by 10 per cent," he said.

TMB this year aims to reduce funding costs by increasing the savings-account deposit base from 25 per cent of total deposits to 30 per cent.

The bank targets raising savings-account deposits by Bt25 billion this year. That would decrease its fixed-deposit proportion, helping TMB to lower interest expenses.

Somruedi Banchongduang

The Nation