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TMB Bank and Thanachart Bank to Sign Merger Agreement

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BANGKOK – TMB Bank and Thanachart Bank are set to sign a merger agreement by next week as all key details have already been settled, says a source familiar with the deal.

Both banks are verifying documents related to the merger, a time-consuming process as the contents of both banks’ documents must be exactly the same, the source said.

After the documents are completely verified, the merger plan will seek approvals from each bank’s board of directors before signing the contract, informing the Stock Exchange of Thailand and submitting details to the Bank of Thailand.

Foreign Shareholders

The Bangkok Post recently quoted two sources as saying the Dutch bank ING, Thanachart Capital (TCap) and the Finance Ministry are expected to hold stakes of 21%, 20% and 18%, respectively, in TMB-Thanachart Bank, the resulting consolidation of TMB and TBank.

Canada’s Scotiabank which owns 49 percent of Bangkok-based Thanachart Bank will own a 5% stake in the new bank, called TMB-Thanachart Bank.

According to the shareholding structure of the two banks, the Finance Ministry holds a 25.9% stake in TMB and ING has a 25% stake. SET-listed TCap holds a 51% stake in TBank, while Scotiabank owns the remainder.

If the process continues as scheduled, the shareholders meetings of both banks will take place next month and the consolidated bank is expected to start operations by December.

Memorandum of Understanding

In February, TMB entered into a non-binding memorandum of understanding to consolidate with TBank through an entire business transfer with an estimated transaction value of 130-140 billion baht.

TMB is the country’s seventh largest bank, with assets of 900 billion baht, while TBank is sixth, with assets worth 1.06 trillion baht at the end of June.

TMB-Thanachart Bank will be the sixth biggest bank after Bank of Ayudhya, with an asset size of more than 2 trillion baht. TBank is the country’s biggest auto hire-purchase lender, while TMB has a strong focus on transactional banking.

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