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BANKING
SOMRUEDI BANCHONGDUANG
Local banks are moving to accelerate their sales of non-core assets to comply with Bank of Thailand regulations.
The central bank has directed local financial institutions to reduce their holdings in non-core companies to under 10% by the end of the year.
As a result, banks have been moving to sell off their equity holdings despite the bearish mood of the stock exchange. Most of the shares represent assets taken over the past decade through debt restructuring.
Siam Commercial Bank, the country's third largest bank, has completed six transactions over the past five months. Holdings worth 112 million baht in five companies have been sold off: Christiani & Nielsen (Thai) Plc, Sri U-Thong Ltd, Siam Commercial Casa Ltd, SG Land Ltd and Siam Administrative Management Ltd.
In a sixth deal, involving Don Muang International Airport Hotel, the bank donated 85,000 shares to the Siam Commercial Foundation. SCB still holds 119,000 shares or 9.92% of the hotel.
Second-ranked Krung Thai Bank last month sold off all its holdings in four companies under the Kamolkij Group for 30.68 million baht. The businesses include Kamolkij Ltd, Lanna Agribusiness, Amornchai Ltd and Farm Kirikan Ltd.
Bank of Ayudhya, meanwhile, last month divested its 2.97 million shares in Time Regency Ltd, a property developer, for 22.03 million baht. BAY also announced new investments in two companies, Srithepthai Plaschem Ltd and Wongpaitoon Group, as part of a debt-restructuring deal.
BAY acquired 16,529 shares of Srithepthai Plaschem and 263.42 million shares of Wongpaitoon at par value of one baht per share for each company. The deal was part of a debt-to-equity swap.
Other deals over the past few months include a sale by Bangkok Bank in March of 40 million baht in stock held in three companies of the Thai Polymer Group, and the sale by TMB Bank of 1.5 million shares worth 100,000 baht in Sanwa Inter-Food.
An analyst at KGI Securities said more asset sales were expected. For the most part, the sales would have a negligible impact on bank balance sheets or portfolios, he said, as provisions had already been set against losses for bad debt.
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