Thai lenders TMB, Thanachart to ink MoU to merge operations by month-end

Photo: Thanachart Bank

TMB Bank and Thanachart Bank (TBank) are set to sign a memorandum of understanding (MoU) for their merger by end of this month, which has been delayed since January, according to local media’s reports.

Prason Poontaneat, permanent secretary of Finance Ministry, a major shareholder in TMB, said that after both banks sign the MOU, the Finance Ministry will seek the approval from the Cabinet.

“We have to submit the detail to the Cabinet and take a few months for due diligence. Therefore, the deal can be sealed before the TBank’s annual shareholder meeting in April at the soonest,” he told the media.

The finance ministry may have to inject fresh capital of around 8 billion baht ($255.38 million) to 13 billion baht ($415 million) into the new entity in order to maintain its shareholding at 25-26 per cent.

The merged entity will retain the name of TMB while the identity of TBank will no longer exist, he cited.

The ministry holds a 25.9 per cent stake in TMB, followed by ING which owns 25 per cent. Meanwhile, Thanachart Capital owns 51 per cent stake in TBank and Canada’s Scotibank holds the remainder.

TMB is the country’s seventh largest bank with assets of 892 billion baht ($28.5 billion), while TBank ranks the sixth with assets worth 1 trillion baht ($31.92 billion) as of end last year.

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