Standard Chartered continues Asian shopping spree in Thailand
Standard Chartered continues Asian shopping spree in Thailand
BANGKOK (Agencies): Standard Chartered Bank continued its
Asian shopping spree on Wednesday, signing a deal to take an
initial 68.4 percent stake in Thailand's Nakornthon Bank PCL for
6.2 billion baht (US$164 million).
The U.K.-based bank, which will take management control when
the deal is finalized in late June, has the option to increase
its stake in Nakornthon Bank to more than 75 percent in five
years time.
Standard Chartered tied up the deal just a few days after
reaching an agreement with Indonesia's Bank Bali to take a 20
percent stake and management control.
"Asia has been going through tough times in the last two
years, but it still remains a powerful part of the world economy
and it is central to our business," said Rana Talwar, Standard
Chartered's chief executive, in a speech.
"We view the current economic environment as an opportunity,"
he said, referring to the financial crisis which has pushed many
Asian banks to open up to foreign investors for the first time.
Standard Chartered will inherit a 67-branch network, two-
thirds of which are in Bangkok. Under Thai law, the British bank
is currently only allowed one representative branch in the
country's capital.
Under the terms of the deal, existing shareholders - including
the founding Wanglee family - will see their stakes written down
to nothing before the government pumps 13 billion bahts the bank
to clean up the books.
According to one foreign analyst, Standard Chartered got a
good deal because the government's injection will clean up
problem loans, which currently total 55 percent of all lending.
"It looks like a pretty good deal for Standard Chartered. The
bank should be pretty clean," said the analyst, who asked not to
be named.
Analysts said Standard Chartered's move would provide a boost
to other minor Thai banks desperately in need of fresh capital to
cover doubtful debts.
"It means deals are more do-able," said ABN AMRO Asia's
Bankok-based banking analyst Andrew Maule, adding that it was the
third foreign partnership secured locally since the Thai economic
crisis erupted in mid-1997.