Right buyers sought for BT, SCIB shares
PARISTA YUTHAMANOP SOMRUEDI BANCHONGDUANG
Bankers and regulators sought to reassure investors yesterday that the financial system is strong after comments by Prime Minister Samak Sundaravej raised doubts about bank stability. BankThai and Siam City Bank, partly owned by the central bank's Financial Institutions Development Fund, issued statements yesterday insisting that their capital positions remained solid.
Mr Samak said in a television interview on Tuesday that the fund last year had injected cash into ''ailing'' banks.
Tarisa Watanagase, the governor of the Bank of Thailand, said yesterday that the FIDF had invested eight billion baht in BankThai since late 2007.
But the fund remained committed to eventually divesting its holdings in the bank, she said yesterday on the sidelines of the Money Expo 2008.
The FIDF currently holds a 42% share of BankThai, 47.5% of Siam City Bank and 55.31% of Krung Thai Bank.
''We are in the process of selling the [BT] shares. If we find a strategic investor that can help complement the bank's operations, we will sell our stake. ... The process is expected to be completed in the near future,'' Dr Tarisa said.
She said Phatra Securities was advising the FIDF, and urged BankThai customers to not panic.
Dr Tarisa said depositors remained fully covered as the limited deposit insurance programme would not take full effect for five years. ''There is no reason to panic. And I think the prime minister has been informed of the [correct] information.''
Finance Minister Surapong Suebwonglee said the FIDF had not set any firm deadline for a share sale.
''Internal operations at the bank are continuing even as it seeks the right partner. A strategic partner does not have to be a foreign bank, but can include local investors as well,'' he said.
''[BankThai] has no problems now, but it could have some in the future if it becomes uncompetitive.''
Tongurai Limpiti, a senior director of the central bank's Fund Operation Department, said Phatra would also assess whether BT needed more capital.
She said the fund also planned to divest its shares in Siam City Bank and Krung Thai Bank in the future.
The FIDF decided to divest its stake in BankThai followed a successful capital increase by the bank last January.
BankThai raised 1.9 billion baht by selling 617.5 million shares to the FIDF and 784.24 million shares to the private equity firm TPG Newbridge.
TPG Newbridge, and its allies collectively hold 42% in BankThai. Its total capital is 25.03 billion baht, above regulatory requirements, BT said yesterday.
The bank posted a first-quarter loss of 1.67 billion baht and a 2007 loss of 6.9 billion due largely to the need to set aside provisions to cover its offshore collateralised debt obligations.
BT president Phirasilp Subhapholsiri said the losses reflected the impact of the US sub-prime mortgage crisis, but that if market conditions improved, its provisions could be reversed to become future profits.
At Siam City Bank, president Chaiwat Utaiwan acknowledged that it had received queries from investors and depositors about Mr Samak's comments, but said operations remained normal.
''While our share price might have fallen slightly, it was quite in line with the sector,'' he said. SCIB yesterday fell 1.15% to 17.20 baht, while BT dropped 0.77% to 1.29 baht.
''[Mr Samak] has his own character. But the money and capital markets are quite sensitive, and react quickly to news. International practice usually has the country's financial issues handled by government experts and specialists when communicating with the public.''
Mr Chaiwat said the FIDF and the bank expected to secure a new strategic partner within two years.
SCIB reported a first-quarter net profit of 1.33 billion baht, against losses of two billion for 2007.
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