Group Lease acquires motorcycle hire-purchase firm, eyes more M&As
June 19, 2014 00:00 By SUCHEERA PINIJPARAKARN
GROUP LEASE (GL), a listed motorcycle finance company, is looking to acquire other firms in the same business to expand its portfolio and increase its competitiveness.
GL yesterday acquired 100 per cent of Thanaban, a motorcycle hire-purchase subsidiary of Thai Credit Retail Bank, with a total value of not over Bt1.53 billion (including all debts and obligations) from TCRB.
Mitsuji Konoshita, chairman and chief executive officer of Group Lease, said the deal showed GL’s strong commitment to Thailand, and noted that the company was ready to buy portfolios from other motorcycle lenders if the opportunity comes.
He said such acquisitions were a way to expand the company’s portfolio quickly. As well, there are many motorcycle finance companies in Thailand, and mergers and acquisitions would be a growing trend in this sector.
Konoshita said the strategic acquisition of Thanaban could boost the merged company’s total outstanding loans by more than 30 per cent to Bt6.2 billion. Moreover, the company will gain higher margins from managing Thanaban because about 10 per cent of that firm’s portfolio is motorcycle-for-cash and financing for used motorbikes.
After the takeover, GL has no plan to change Thanaban’s name because it has been established in this industry for 30 years and its brand is well known, he said. Thanaban will cover motorcycle-for-cash and used bikes, while GL will provide loans for new motorcycles.
He predicted improved financial performance for GL during the rest of the year, after the first quarter was affected by the political unrest.
In the first quarter, GL set higher provisions for bad and doubtful debts of customers who had lost their income following the politically induced economic slowdown.
Winyou Chaiyawan, chief executive officer of TCRB, said the bank unloaded Thanaban, as it wanted to focus on its core business of lending to small enterprises.
The bank wants to build its portfolio of small businesses and strengthen its brand awareness before considering listing on the stock market, he added.
“We are expanding loans in the provinces through a new model – lending branches and relationship managers. Both have a mission to provide loans, and we will use our branches in Bangkok as the channel for mobilising deposits,” he said.