TBank plans rapid growth after stake sale
Thanachart Bank will showcase its latest financial products at the upcoming Money Expo, scheduled for May 10-13 at the Queen Sirikit National Convention Centre. Several rewards, including a trip to the Maldives, will be offered as incentives to potential
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Thanachart Bank (TBank), a small retail player, plans to become a mid-sized institution with assets of about Bt450 billion in the next three to five years, following the sale of a major shareholding to Canada's Nova Scotia Bank (ScotiaBank).
TBank's total assets currently amount to about Bt270 billion, ranking it eighth among Thailand's banking community, with a market share of 3 per cent. Asset expansion to Bt450 billion, or a 5-per-cent market share, is a first step in the bank's growth plans following a deal in which ScotiaBank will acquire a 24.99-per-cent stake in TBank, says its chairman, Banterng Tantivit. On the Thai banking ladder, TBank is now pursuing Siam City Bank, which has total assets of about Bt460 billion. Banterng said TBank also planned to raise its return-on-equity ratio to 20 per cent in the medium term, from the current 1.48 per cent. TBank signed a memorandum of understanding with the Canadian bank last month. ScotiaBank will acquire a 24.99-per cent interest in TBank by buying 157.13 million shares at Bt16.37 apiece for a total cost of Bt2.57 billion. The foreign bank is currently conducting due diligence on TBank's assets. The agreement provides that ScotiaBank may buy additional shares to boost its stake in TBank to 49 per cent, but that would require approval by the Bank of Thailand. Banterng said the bank would continue to concentrate on its core business of auto hire-purchase loans after the acquisition deal was completed. Even without the new shareholder, Banterng said his bank could maintain its ranking as the Kingdom's No 1 in the auto-loan market. However, cooperation with ScotiaBank has served to highlight this confidence. The bank hopes to strengthen its corporate-loan and treasury business, as the new shareholder's strengths are in these areas. ScotiaBank is expected to transfer executives to Thailand to help oversee TBank's wholesale operations. First, however, it will send staff to help develop TBank's credit-card loans. Banterng said the acquisition deal should be completed by the end of next month. However, it could be suspended or even revoked if a violent situation arose in Thailand in the meantime. "Just as the acquisition deal between Bank of Ayudhya and GE [General Electric] was extended on share payment after the September coup, if Thailand's political situation turned more violent - such as another coup taking place - then the bank's deal would probably be suspended. But right now, it's still going ahead, and ScotiaBank has confirmed it will pay for the shares by June," he said.
Somruedi Banchongduang The Nation
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