BAY seeks M&A jolt to investment banking

Bank of Ayudhya (BAY) aims for a 25-30% increase in revenue from investment banking business next year.

The country’s fifth-largest bank by assets has five merger and acquisition (M&A) deals in the pipeline, some of them quite large, said Sittichai Mahaguna, the bank’s newly appointed head of the investment group. He wouldn’t disclose the sectors for the deals or when they are expected to conclude.

The bank’s customers are buyers, Mr Sittichai said, with most deals involving foreign partners eyeing business expansion in overseas markets.

He said fund mobilisation via the debt market has gained in popularity in Thailand and is expected to continue as a trend.

New corporate bonds issued this year are expected to reach 800 billion baht.

The bank aims to be in the top five underwriters for long-term corporate bonds next year, Mr Sittichai said.

The Thai Bond Market Association and Bloomberg data ranked BAY as the secondlargest lead underwriter for long-term corporate bonds in the first nine months of 2018.

He said demand for project financing will be driven by the government’s bigticket infrastructure investment, together with customers of Mitsubishi UFJ Financial Group (MUFG) who are interested in such investment.

Japan-based MUFG holds a 76.9% stake in BAY through Bank of Tokyo-Mitsubishi UFJ.

“We are also advising on acquisitions and public offerings of real estate investment trusts [REITs],” Mr Sittichai said.

Demand for project and structure finance is expected to grow further, driven by the progress of the Eastern Economic Corridor, he said. For such finance, BAY aims to focus on transactions of at least 5 billion baht, while for the debt capital market such deals will be at least 2 billion baht.

In addition, BAY aims to collaborate with Krungsri Securities and use MUFG’s global platform to provide advisory services for initial public offerings and REIT offerings.

Two REITs worth 7 billion baht in the bank’s pipeline are expected to launch next year, Mr Sittichai said.

BAY shares closed yesterday on the Stock Exchange of Thailand at 40.50 baht, up 25 satang, in trade worth 5.3 million baht.