Scotiabank Closes Deal To Buy 25% Of Thanachart Bank

Scotiabank closes deal to buy 25 per cent of Thailand's Thanachart Bank

Published: Wednesday, July 18, 2007 | 10:26 PM ET

Canadian Press

TORONTO (CP) - Bank of Nova Scotia (TSX:BNS) says it has closed the deal to buy a minority investment in Thailand's Thanachart Bank, further expanding its operations in the Asia-Pacific.

Scotiabank is paying about C$225 million for about 25 per cent of Thanachart Bank, Thailand's eighth-largest lender and a leading auto loan specialist.

Toronto-based Scotiabank said Wednesday it has received all the necessary regulatory approvals in Canada and Thailand to close the deal.

Thanachart has about C$9.1 billion in assets and 6,000 employees. It has 142 branches and 260 banking machines across the Southeast Asian country. The bank has 24 per cent of the auto lending market in the country, with 500,000 outstanding loans.

Officials at Scotiabank, which has been operating in Thailand for 26 years, said at the time of the purchase in March that it is attracted by Thailand's low bank concentration, compared with other Asian countries, young demographics, rapid rate of economic growth of four to five per cent, and an expanding middle-class.

"For more than a century, Scotiabank has recognized that unique opportunities for growth can be found beyond Canada's borders," Rob Pitfield, executive vice president, international banking for Scotiabank said in a release Wednesday. "This partnership with Thanachart builds on our solid track record of strategic investments in high potential markets like Thailand."

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The transaction gives Scotiabank representation on the Thanachart board of directors and in its management.

Scotiabank's agreement also gives it the option to increase its ownership stake to 49 per cent for an equivalent price by the end of the year.

The option subject to a one-year extension and further call rights for a four-year period.

Source: CBC Canada