The bank also posted a reviewed net loss for the first six months of Bt1.09 billion, against a net profit of Bt323.12 million last year.

When the bank earlier reported unreviewed second-quarter figures, it showed a net profit of Bt301.95 million.

However, the Financial Institutions Development Fund (FIDF) told BankThai last week that it would pay the bank Bt7.98 billion in yield maintenance income on Covered Assets Pool loans transferred to Thai Asset Management Corp. That was Bt1.69-billion lower than what the FIDF had previously agreed to pay the bank. The bank said yesterday that it recognised the difference as an expense in the period, resulting in the unreviewed net profit turning into the reviewed net loss of Bt1.09 billion.

BankThai's second-quarter operating profit without the expense was Bt302 million, an increase of 182 per cent on the year thanks to increases in interest, dividend and non-interest income.

The bank last saw an annual net loss in 2003, when it was Bt3.94 billion in the red, then recovered to post net profits of Bt545.72 million in 2004 and Bt611.25 million last year.

Seamico Securities has recommended a "trading buy" on BankThai's stock with a fair value estimate of Bt7.20 per share, revised down from Bt7.40.

Although a possible partnership with TPG Newbridge is positive news for the bank, the resolution of yield maintenance meant the bank had to restate its earnings to show a net loss in the first half, the broker said.

The move prompted the broker to revise its 2006 earnings forecast from a net profit of Bt1.14 billion to a net loss of Bt534 million. The stock yesterday closed down 0.76 per cent at Bt6.55.

On Monday, the bank said it would enter into exclusive talks with the US investment firm for a potential investment of 24.99 per cent in the bank and expected the deal to be sealed in November. If BankThai clears TPG Newbridge's due diligence, it will earmark 500 million of the planned issuance of 940 million capital-increase shares to TPG Newbridge. The capital injection from the US firm would strengthen the bank's financial performance and its capital adequacy ratio would jump from 9.6 per cent now to 12-13 per cent.

, the broker said.

However, the broker does not expect BankThai to gain any management know-how from TPG Newbridge, which is an investment company and will only become a financial partner.