GE talks with SCB for BAY stake 'fail'

According to a report in the daily newspaper Thai Rath, SCB was one of the local banks involved in the negotiations for the stake. However, the paper reported that the talks collapsed as the Thai bank was proposing a share swap, while GE wanted a cash settlement as it was not interested in a stake in any bank here.
A banker who declined to be named said SCB did not have enough cash to purchase the stake in BAY.
If it had to pay cash, it would need to raise capital. He also saw no synergy between SCB and BAY, as both are active in retail banking.
“BAY should be more attractive to regional banks that are seeking a foothold in the Thai banking industry. Retail banking could strengthen the regional bank’s presence here,” the source said.
GE was reportedly in talks with several regional banks including Malayan Banking (Maybank) and CIMB Group. Earlier, it sold a 7.6-per-cent stake in BAY for Bt14.65 billion.
Another banker said that under the Bank of Thailand’s “one presence” rule, a local bank could not hold a stake in another bank.
If two banks are merged, then one banking licence must be returned to the central bank.
“Obtaining a commercial-bank licence is not easy; all commercial banks want to keep their licences.
“There is a very low chance of merger among local banks in Thailand,” he |said.
While the major shareholder wants to sell off its stake, BAY continued to demonstrate financial strength.
Krungsri Consumer, its consumer-finance business unit, yesterday announced strong financial results for the first nine months, thanks to revival in demand for electronic products by consumers who were affected by the flood last year.
Thakorn Piyapan, managing director of Krungsri Consumer, said the unit had witnessed 20-per-cent annual loan growth in the past years but this year, it enjoyed a 30-per-cent increase.
The company’s outstanding loans rose by 31 per cent to Bt94 billion and the total spending increased by 21 per cent to Bt174 billion.
Despite robust loan growth, the non-performing-loan rate for the credit-card and personal-loan business was below 1.5 per cent.
The number of client accounts is expected to reach 6 million by the end of this year, while outstanding loans will rise to Bt99 billion.
Thakorn also anticipated further 20-per-cent growth next year, driven mainly by demand for smart phones and tablet computers.