TMB-TBANK merger deal set to be concluded by late 2019, or early 2020

BANGKOK, February 27 (TNA) - Thailand's two commercial banks, TMB Bank (TMB) and Thanachart Bank (TBANK), have set a target for the conclusion of their merger deal by the end of this year or by early next year to then become the sixth largest commercial bank in the country's banking sector eventually with their combined assets of about 1.9 trillion baht. TMB sent a written notification to the Stock Exchange of Thailand (SET) on February 26 that it has signed a non-binding memorandum of understanding (MOU) with TBANK and its major shareholders, including Thanachart Capital Public Company Limited (TCAP), the Netherlands-based ING Groep N.V. (ING) and the France-based Bank of Nova Scotia (BNS) on the outlined framework of mutual understanding and principles for its negotiations towards the meger with TBANK. TMB said TMB and TBANK both have their own strong points that would support each other, pointing out that TMB has an outstanding strategy in mobilizing deposits through initiatives which have been different from traditional programs, while TBANK is a leading lender for small-scaled borrowers for their purchase of cars under leasing deals, in particular, and their merger in the form of the Entire Business Transfer based on the central bank's Single Presence Rule would, thus, enhance their potential as a new business entity in the mobilization of deposits and make the then loan structure become more equilibrated. Based on the non-binding MOU, TBANK will restrcuture its banking business before the merger by transferring its stakes in its subsidiaries and partners to its major shareholders, namely TCAP and BNS, while TMB will pay a total cash compensation of 130-140 billion baht for the TBANK business restructuring by issuing debt instruments and additional shares to corporate and individual investors. After the merger, set to be immediately proceeded after the TBANK's business restructuring is completed, expected within this year, the Thai Ministry of Finance, TCAP and ING are likely to become the major shareholders of the newly-established bank with its new name or a rebranding, while BNS is likely to significantly reduce its shares in the newly-integrated bank. TMB announced that its final merger agreement with TBANK could have some differences from the existing non-binding MOU, but projecting that the new bank after the merger would have its clients of more than 10 million. (TNA)