Thanachart Bank today confirmed that it has reached an agreement to acquire almost 48 per cent of Thailand’s Siam City Bank. The agreement is subject to regulatory approvals in Thailand. The stake in Siam City Bank is currently owned by Thailand’s Central Bank through the Financial Institutions Development Fund (FIDF). Canadian-based Scotiabank owns 49 per cent of Thanachart Bank.

In accordance with securities laws in Thailand, upon closing of the 48 per cent stake Thanachart Bank will launch a tender offer for the remaining shares in Siam City Bank. Subsequent to completion of the tender offer and any additional regulatory approvals, Thanachart Bank and Siam City Bank would be merged. Scotiabank would continue to own 49 per cent of the merged bank, to be known as Thanachart Bank with Thanachart Capital Pcl owning almost all of the remaining 51 per cent. As part of the financing for this transaction, Scotiabank and Thanachart Capital would subscribe on a pro rata basis to additional shares in Thanachart Bank with Scotiabank contributing approximately C$650 million in capital to the bank. Together, the combined bank will have more than 660 branches, 2,100 ABMs, and 18,000 employees, which will make it the fifth largest bank inThailand as measured by assets and branches.

“We are very pleased to have successfully concluded discussions with the FIDF. We look forward to the completion of the transaction and the merger with Siam City Bank, which will create the fifth largest bank in Thailand, further strengthening the country’s banking sector and bringing increased consumer choice to the market,” said Banterng Tantivit, Chairman, Thanachart Bank.

Thanachart Bank
Scotiabank has operated in Thailand since 1981, providing corporate lending, trade finance and treasury services to local and international companies. In 2007, Scotiabank acquired 24.99 per cent of Thanachart Bank and increased this stake to 49 per cent in 2009.

“On closing, this transaction would be immediately accretive to Scotiabank and is a prime example of the significant potential in international markets and the opportunities that Scotiabank has to achieve revenue growth by making strategic investments in countries where we have a well-established presence and a solid understanding of the market,” saidRob Pitfield, Scotiabank Group Head, International Banking. “This market has solid fundamentals and good prospects for long-term growth. Scotiabank remains committed to pursuing the right growth opportunities and this agreement is a significant step forward in Asia to complement a diversified emerging market strategy in the Caribbean, Central America and Latin America,” he added.

“Just over one year ago we increased our stake in Thanachart Bank to 49 per cent, and today we are seeing once again the growth opportunities that are present in the attractive Thai market,” said Michele Kwok, Scotiabank Senior Vice President, Asia/Pacific and theMiddle East. Based out of Hong Kong, Ms. Kwok heads Scotiabank’s Regional Office, overseeing the Bank’s operations in the 12 countries and territories where it operates in this area. “We look forward to the opportunity to work with our colleagues at Thanachart Bank and Siam City Bank and build on our abilities to serve this market and our over four million customers in Thailand.”

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