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Published on September 27, 2007

Its shareholders' meeting yesterday approved the acquisition of all shares of GE Capital Auto Lease (GECAL) from General Electric Capital Asia Investment in a deal worth about Bt17 billion. The purchase is subject to approval from the Bank of Thailand, which is considering the matter.

BAY forecasts that the acquisition deal will be completed by the end of the year, following the central bank's approval.

GECAL currently holds about 20 per cent of the market for used-car loans, ranking at the top of the industry alongside Thanachart Bank. Its loan portfolio stands at Bt93 billion.

Before the move to acquire GECAL, BAY had set up a financial subsidiary, Ayudhya Capital Lease (AYCL), in January.

Executive vice president Yaowalak Poolthong said after the shareholders' meeting that AYCL would concentrate on new-car loans, while GECAL would focus on used-car loans, which fall under its area of expertise.

 "Although the bank will have two auto-leasing subsidiaries, their operation will be under a single command basis. The bank will allow them to continue functioning like this, but in the longer term the two companies will consolidate," Yaowalak said, adding that the two firms currently share back-office facilities.

The country's sixth-largest bank has targeted to expand its consumer loans to 50 per cent of its overall lending portfolio by the end of 2010. The proportion is currently about 15 per cent, which is expected to increase to 33 per cent after the acquisition deal is complete.

Chairman Veeraphan Teepsuwan said at the meeting that the acquisition would expand the bank's assets and generate more revenue. GECAL has successfully operated in Thailand for more than 15 years.

GECAL recorded a net profit of Bt1.04 billion last year. The company normally generates net earnings of about Bt1 billion.

Somruedi Banchongduang

 The Nation