LOOKING SOUTH
Canada-based Scotiabank is looking to divest itself of its 49% stake in Thanachart Bank to focus more on Latin America.
Canada-based Bank of Nova Scotia (Scotiabank) is exploring opportunities to divest itself of its 49% stake in Thanachart Bank (TBank), according to a statement by Thanachart Capital Plc (TCAP).
TCAP will coordinate with the Canadian lender if Scotiabank decides to sell its holding in TBank, TCAP said in a filing with the Stock Exchange of Thailand yesterday.
TCAP owns the remaining 51% stake in TBank.
According to TCAP, the Canadian bank will sell its shares in TBank only to a large and financially strong international financial institution.
The new shareholder must agree to coordinate with TCAP to strengthen the bank’s operations.
The transaction must also win approval from the Bank of Thailand, TCAP said.
Scotiabank said earlier it was considering either partially or entirely selling its stake in Thailand’s sixth-largest lender by assets.
The move is in line with the policy of Canada’s third-largest lender by assets to prioritise expansion in Latin America for international growth, with an emphasis on Mexico, Colombia, Chile and Peru.
TBank is the country’s biggest automobile lender.
More than half of its loans outstanding of 771 billion baht at the end of September were auto hire purchase, while 31.5% were corporate and SME loans, 12.4% were mortgages and the rest were other retail loans.
TBank’s net profit for the three months to September was 2.71 billion baht, up from 2.43 billion in the same period last year.
Nine-month net profit rose to 7.98 billion baht from 7.33 billion a year earlier.
A formal sale process could start early next year if Scotiabank decides to proceed with a divestment, according to two sources quoted by Bloomberg.
The lender has yet to make a final decision, and any deal would be subject to government approval, those people said.
The TBank stake has a carrying value of C$2.4 billion ($1.75 billion) on Scotiabank’s balance sheet, according to its latest annual report.
The Toronto-based bank held a 24.98% stake in TBank in 2007 before raising its holding to 49% in 2008.
TCAP shares closed yesterday on the SET at 33.25 baht, down 50 satang, in trade worth 186 million baht.