TMB-Thanachart Bank’s shareholding takes shape

Dutch bank ING, Thanachart Capital (TCAP) and the Finance Ministry are expected to hold stakes of 21%, 20% and 18%, respectively, in the new bank born from the consolidation of TMB Bank and Thanachart Bank (TBank), say two sources familiar with the matter.

Canada’s Scotiabank will own a 5% stake in the new bank, called TMB-Thanachart Bank, while small shareholders and others could make up 34% and 2%, respectively, said one source.

According to the shareholding structure of the two banks, the Finance Ministry holds a 25.9% stake in TMB and ING has a 25% stake. SET-listed Thanachart Capital holds a 51% stake in TBank, while Scotiabank owns the remainder.

To facilitate the deal, TMB will issue new shares to raise fresh funds to pay 130 billion baht to TCAP and Scotiabank for their stake in TBank, the source said, adding that TCAP will in turn use proceeds worth 45 billion baht to buy TMB’s newly issued shares — 25 billion baht to acquire shares held by TBank in the bank’s subsidiaries and affiliate firms and 11 billion baht as working capital.

The source said the potential shareholding structure in the new bank is subject to change, dependent on both banks’ boards.

Another source at the Finance Ministry said the ministry is not playing a diminished role in the new bank, even though it will be the third-largest shareholder after ING and TCAP. The ministry is responsible for appointing the bank’s chairman.

And while the Finance Ministry’s shareholding will decline to 18%, the ministry’s equity asset value in the new bank will increase, this source said.

In February, TMB entered into a non-binding memorandum of understanding to consolidate with TBank through an entire business transfer with an estimated transaction value of 130-140 billion baht.

TMB said recently that it planned to finance the transaction via a combination of debt and equity financing. Equity financing is expected to account for 70% of the transaction value.

TMB is the country’s seventh-largest bank, with assets of 900 billion baht, while TBank is sixth, with assets worth 1.06 trillion baht at the end of June.

TMB-Thanachart Bank will be the sixth-biggest bank after Bank of Ayudhya, with an asset size of more than 2 trillion baht.

TMB Bank and TBank are reportedly due to sign a merger agreement this month. If the process stays on schedule, the shareholders’ meetings of both banks will take place next month.

The consolidated bank is expected to start operations by December.