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Published on December 19, 2007

Bangkok Bank might dump its ACL Bank stake on the bourse because its deal with a Chinese bank looks likely to fall through due to a delay in a law allowing greater foreign holdings of local banks.

"We are seeking other options [to divest ACL Bank]. We might sell the shares in the stock market but ACL Bank's stock price might drop," Bangkok Bank chairman Chatri Sophonpanich told reporters yesterday.

The country's largest bank recently agreed to sell its entire 19.3-per-cent stake in ACL Bank to the Industrial Commercial Bank of China, which would increase the foreign holding in the small bank from about 20 per cent to about 40 per cent.

That means the deal depends on the new Financial Institutions Act, which raises the ceiling on foreign ownership in commercial banks from 25 per cent to 49 per cent.

The law is expected to go into effect in the middle of next year, but according to the central bank's one-presence rule prohibiting all commercial banks from holding any shares in other banks, Bangkok Bank must sell off ACL Bank by the end of this year.

Bangkok Bank president Chartsiri Sophonpanich said on Monday that the bank would seek approval from the central bank to delay the sale of its interest in ACL Bank.

"If the deal is delayed, it would impact the price, so we're looking for other choices for the share sale as fast as we can. But it can't be done this year," Chatri said.

The bank's financial adviser, Bualuang Securities, would decide on the best alternative.

ACL's stock price has kept falling over the past few months. It averaged Bt6.35 in August, compared with Bt6.20, Bt5.85 and Bt5.35 respectively in September, October and November. It closed at Bt4.66 yesterday, down 1.69 per cent.

Chatri also said competition in the banking system would get tougher next year, with the main battlefields in loans and deposits.

Somruedi Banchongduang

 The Nation