Canadian Bank Acquires Thanachart Stake

[george]

Canadian bank acquires Thanachart stake

BANGKOK: -- Canada-based Bank of Nova Scotia (Scotiabank) has acquired a 24.99 per cent stake in Thanachart Bank Plc, one of Thailand's smallest banks, and is ready to increase its shareholding to 49 per cent by the year-end if allowed by law.

Thanachart Bank chairman Buntherng Tantivit revealed that Scotiabank had agreed to purchase 24.99 per cent of the bank's shares at Bt 16.37 each, totalling Bt 7.1 billion or C$240 million

Of the total shares, 157,130,216 will be bought from the bank's parent firm Thanachart Capital and 276,263,200 will be new shares issued by the bank. The share subscription is set to be completed by June 30.

With the deal, Scotiabank is able to appoint its representatives as members of the bank's board in proportion to the shares it held in the bank. It will also have a significant role in the management of the

bank.

In addition, the Canadian bank is allowed under the agreement to acquire up to 49 per cent of the total shares by December 31, 2007 at the same offering price if the Financial Institution Bill wins the National

Legislative Assembly's approval.

With the partnership, Mr. Buntherng said the bank would be in a position to compete with leading commercial banks in Thailand since the increased assets accommodated its business expansion plan.

Rob Pitfield, Scotiabank's executive vice-president, said the bank had expanded business worldwide through the opening of more branches and the merger and acquisition.

The bank's strategy for business expansion is to adjust itself to local markets of each country it had entered and count on its partners' strong points and strategic advantage for the maximum benefit.

With Bt 257.47 billion in assets, Thanachart Bank is now running 142 branches and 260 Automatic Banking Machines (ABMs). The bank is also the major auto lender with a 24-per-cent market share.

--TNA 2007-03-30

[samran]

Thanachat must have a retail banking license of a type which will let it operate quite freely in Thailand. Foreign banks are very keen to get their hand on these.