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DBS' existing 16.1 per cent stake in TMB is expected to be reduced to 6.8 per cent assuming full subscription of the proposed offer, the bank said in the statement released on Monday.

 DBS had earlier welcomed TMB's recapitalisation plan and, having regard to the interest of all TMB shareholders, voted in favour of the resolutions at an extraordinary general meeting on 27 November.

 "DBS' decision not to subscribe to its share of the offer is consistent with its intention to reduce its participation in the strategic direction of TMB given the change in TMB's post-recapitalisation shareholding structure," the bank said.

 Thailand is an important market in Asia and DBS will continue to work with the Ministry of Finance and the Bank of Thailand as it assesses its options in the country, it noted.

  DBS' presence in Thailand began in 1993 when it obtained a Bangkok International Banking Facility (BIBF) license. In 1998, DBS acquired a majority stake in what was subsequently renamed DBS Thai Danu Bank (DTDB). With the DTDB acquisition, DBS gave up its BIBF license in 2000, and maintained a small representative office in Bangkok.

 In 2004, DTDB, together with the Industrial Finance Corporation of Thailand, was merged into Thai Military Bank (TMB) to create Thailand's fifth largest bank by assets. DBS is the second largest shareholder in the merged TMB with a 16 per cent interest.

- The Nation