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Published on April 14, 2008

Land and Houses Retail Bank (LH Bank) is considering a takeover bid for SCB Quant Asset Management as part of its expansion plan, according to an investment banking source.

SCB Quant is a subsidiary of Siam Commercial Bank unit, SCB Securities.

A source, who asked to remain anonymous, said while LH Bank wanted an asset-management unit to accommodate future clients, the bank also had a plan to divest loss-making subsidiaries.

"SCB also has SCB Asset Management, so SCB Quant looks superfluous," the investment banker said.

"Both sides are in negotiations, and the selling price could be at book value. This would be cheap compared with the cost of applying for a new licence. There should be a deal soon because SCB and Land and Houses, which owns LH Bank, have a

good relationship" the source said.

However, SCB Quant senior executive Paritat Lerngutai said management had not been informed of any takeover plan. He declined to comment further on the issue.

The source said although LH Bank was a small player and most of its business was from retail banking, it had good growth prospects, and an asset-management operation could help expand its business and client base.

SCB Quant has suffered losses for years, due to its focus on selling derivative products to private funds. Because of the complicated structure of such products, only a few clients really understand them. Consequently, this drives potential clients away.

SCB Quant was established in 2003 with registered capital of Bt50 million and paid-up capital of Bt25 million. In the first half last year, the company posted a net loss of Bt6.2 million, compared with annualised losses of Bt11.46 million in 2006 and Bt3.5 million in 2005.

Siriporn Chanjindamanee

The Nation