Boontuck seeks to boost tmb bank's performance

Speculation by market-watchers has long had Boontuck as prominent candidate with strong backing from ING Group, though it was earlier reported that Government Housing Bank president Khan Prachaupmoh was strongly supported by the Finance Ministry, another major shareholder of the bank, as an alternative candidate.

Banking analysts praised the appointment as positive news for the country's sixth largest bank, which suffered the biggest loss in the industry last year, though they are still cautious about the bank's business plan. They recommended "hold" and "buy" for TMB stocks, which have been oversold by investors concerned about the bank's unhealthy financial status.

The bank stock closed on Friday at Bt1.17, up 0.86 per cent from the previous close.

An analyst from Asia Plus Securities said the sentiment towards TMB shares was better because the market believed that with a new CEO there would be a clearer business plan.

"Mr Boontuck has a lot of experience in banking; therefore the bank's business is likely to be better. However, it's not a short-term issue, because he needs to take time for planning and to consider which direction the bank should move in," said the analyst. Therefore Asia Plus recommended "hold" on TMB, suggesting investors wait and see.

The analyst from Siam Commercial Bank Securities, Kittima Sattayapan, recommended "buy" for TMB because right now the share price is very low and is likely to turn around with the bank's new CEO, "who is a professional in banking and has a good reputation".

KGI Securities (Thailand) said it was maintaining a neutral rating with a target price of Bt1.61 a share, saying: "This is positive news as Boontuck has strong expertise."

The bank has gone through months of seeking a CEO to replace former chief executive and president Subhak Siwaraksa, who resigned after ING Group bought 26.1 per cent of TMB during its Bt38-billion recapitalisation last December. The appointment is part of the management change after the capital increase with the new shareholder. Earlier, aside from Khan, Suphajee Suthumpun, vice president, general business of IBM Asean, was another executive tipped for the CEO post.

However, it is apparent that the Finance Ministry stepped back in favour of the Dutch institution's decision for Boontuck at a time when TMB desperately need to improve its balance sheet.

Boontuck is a veteran of Kasikornbank, where he served for more than two decades. He graduated with an MBA in international business and finance from New York University. He was a key part of the pioneer team that developed investment banking at Kasikornbank years ago.

He played a crucial role when the bank issued its hybrid securities, the so-called Stapled Limited Interest Preferred Shares, which could be counted as banks' tier-one capital during the tough times when all banks needed capital to survive after the 1997 financial crisis.

Boontuck later looked after large-corporation business as well as small- and medium-sized-enterprise customers.