Hsbc, standard chartered vie for bankthai

HSBC Holdings, Standard Chartered and the CIMB Group are among potential bidders for a 42-per-cent stake in unprofitable BankThai, partly owned by US buyout firm TPG, say sources familiar with the plan.

Texas-based TPG, which owns 42 per cent of the Thai bank with its partners, also plans to bid for the stake held by the Bank of Thailand (BOT), the sources said, declining to be identified before an announcement. Potential buyers were asked to submit final offers by the end of this week.

However, the Financial Institutions Development Fund yesterday declined to confirm the report. It said that by the end of the month, the central bank would acknowledge all conditions and prices proposed by all bidders, who were not named.

Tongurai Limpiti, senior director of the BOT's Fund Operation Department, yesterday said the BOT could not set a deadline for concluding the share-purchase deal for BankThai, because the central bank needed time to negotiate with the bidders.

The new investor may help BankThai, which has a market value of Bt8.7 billion, return to profit and expand its branch network. BankThai recorded its biggest annual loss in eight years following a write-down of collateralised debt obligations (CDO).

It also gives the stake buyer a foothold in an economy expected to expand as much as 6 per cent this year, the fastest in four years.

"A partnership with a new foreign partner should be positive for BankThai; the bank needs another restructuring," said Sukkawat Prasurtying, chief investment officer at Manulife Asset Management, which manages about Bt6 billion worth of assets. "Thailand remains attractive to foreign banks, because its economic fundamentals are not that bad and remain very sound."

"We accept that BankThai has problems," Finance Minister Surapong Suebwonglee told reporters last Friday.

"These problems have been widely known. Anyone who wants to buy a stake should know about it."

BankThai raised money twice in the past 10 months by selling shares to a BOT unit and the Asian division of TPG.

The company lost Bt6.93 billion last year after investing US$310 million (Bt10.31 billion) in CDOs, the most among Thai banks. BankThai has 146 branches.

"There are people visiting us for due diligence," BankThai executive vice president Sutee Losoponkul said yesterday, declining to disclose the identities of potential investors.

The bank's shares have lost 6.6 per cent this year, compare d with a 5.9-per-cent decline in the 11-company Stock Exchange of Thailand Banking Index.

Standard Chartered, the London-based bank that opened a branch in Thailand 114 years ago, bought 75 per cent of Nakornthon Bank for Bt12.4 billion in 1999 and the rest in 2005.

Standard Chartered has 38 branches in Thailand and plans to add more, Bangkok-based spokeswoman Pratamaporn Svasti-Xuto said in an e-mailed response to questions.

"Like a number of banks, we have been looking at the opportunity," Svasti-Xuto said.

She declined to elaborate.

Thailand suspended the foreign-ownership limit on banks during the 1997 Asian financial crisis.