Phatra aims to become a global bank
The merger between top-five brokerage Phatra Capital and small-scale Kiatnakin Bank (KK) announced two weeks ago is not the Phatra group's final move, as the next target is to become a global bank to deal with the changing business environment, Aphinant
As the two financial firms have the same overview and goals in growing business by considering shareholders’ benefits as a major priority, the deal was done quickly, he said.
Though mergers and acquisitions in the financial sector are not new, they can be a good choice for any firms to see their businesses grow. However, financial institutions are now forced to consolidate by the emergence of at least two threats: full liberalisation of brokerage fees, which will take an effect on January 1, and the Asean Economic Community, which will become a single market in 2015.
“We were able to conclude the deal with major shareholders of Kiatnakin Bank in three or four months,” Aphinant said. “The reason we could make the deal so quickly is that we had a target and we both showed our intention not to throw away our businesses. This is confirmation that we are ready to continue strengthening the merged business to add value and be open for new business partners in a bid to upgrade it to a global bank if the window of opportunity is open.”
He added: “I believe that the Phatra-KK deal will help spark the financial industry.”
He said several M&A deals in Thailand came about because firms had no other choice if they wanted to survive under the changed business environment. Phatra Capital is not unaffected by this trend but all of the steps it has taken have been aimed at maximising the benefits for the organisation and the shareholders.
Phatra’s moves can be witnessed historically since the management bought back shares from the US-based investment bank Merrill Lynch and then listed the shares on the stock market under the name Phatra Securities. The company has changed its name to Phatra Capital and restructured its organisation to become a holding company.
“Every move we make is based on a good opportunity. We’re not forced to do it for survival. So the Phatra-KK acquisition deal will ensure a win-win situation for both of us,” Aphinant said.
He conceded that Phatra Capital was always looking for acquisition opportunities as part of its business plan. This is no surprise; what did surprise the market was how the deal was concluded so fast.
The merger transaction is expected to be complete by the end of next year’s second quarter or early in the third. After the deal is completed, the merged company’s market share by brokerage fees will rise to 6.14 per cent, jumping to the second rank from fifth with 5.10 per cent. Kim Eng Securities is ranked in first place with 13 per cent.
Aphinant said Phatra Securities, a subsidiary of Phatra Capital, and Kiatnakin Securities, a subsidiary of Kiatnakin Bank, would not merge because they have different groups of clients. Phatra Securities focuses on institutional and high-net-worth individual investors while Kiatnakin Securities focuses on small individual investors.
Among the several M&As in the financial industry this year, Bualuang Securities was 100 per cent acquired by Bangkok Bank, Kim-Eng Securities (Thailand) was taken over by Malaysia-based Maybank, and Finansia Securities merged with Syrus Securities.
“To survive amid a stiffer market, M&A deals will be seen more,” Aphinant said.
