The International Finance Corporation (IFC), a member of the World Bank Group has proposed to subscribe up to $150 million in US dollar-denominated bonds to be issued by Bangkok-based TMB Bank Public Company Limited (TMB).
IFC will be the sole subscriber in the seven-year US dollar-denominated SME/green bonds to be issued by TMB through a private placement, the development institution said in a disclosure.
The funding will be used by the Thai bank to finance small and medium enterprises and green projects, IFC said.
“The project will support the bank’s ongoing efforts to increase its lending portfolio to SMEs, an important sector that drives economic growth and employment, and to promote climate-smart and other environmentally sustainable investments in the country,” it said in its disclosure.
Bangkok-based TMB is engaged in commercial banking and is the seventh largest bank in Thailand in terms of assets, amounting to about Baht 829.7 billion ($25.9 billion) and net loans of about Baht 623.6 billion ($19.5 billion) as of April 2018.
The financing by IFC is also aimed at supporting “climate-smart and environmentally friendly projects”.
“The green tranche of the bond will the first bond issuance aligned with the Global Bond Principles in Thailand, which will result in the creation of a new asset class in the country,” IFC said.
TMB, which is listed on the Stock Exchange of Thailand, has long been a client of IFC. In 2012, IFC had extended it a $100-million loan to support flood-affected small and medium exporters.
Also in 2017, IFC and TMB Vientiane Branch of TMB Bank partnered to provide a $9.1-million equivalent Lao Kip financing to ACLEDA Bank Lao Ltd, in Laos for SME support.
In 2007, TMB formed a business partnership with ING Bank, a leading financial institution from the Netherlands, which is also the largest shareholder of TMB with an ownership of 30.8 percent.
TMB Bank was until recently led by chairman Rungson Sriworasat who resigned from the bank on June. The new chairman is yet to be announced.
TMB is currently operating under two segments, commercial banking and retail banking, and has subsidiaries including Phayathai Asset Management Co., Ltd., Designee for ETA Contract Ltd. and TMB Asset Management Co., Ltd.