The State Enterprise Policy Office (Sepo) has proposed that the Finance Ministry pump fresh funds into a new bank to be created by the merger of TMB Bank and Thanachart Bank (TBank), aiming to maintain the ministry's shareholding.
Sepo considers it worthwhile for the Finance Ministry to inject new capital to at least maintain its shareholding in the merged bank, said a source familiar with the issue. The ministry would be able to seek funding for the measure.
Maintaining its shareholding will give the Finance Ministry a voice in managing the consolidated bank through the chairman, whose position will be filled by the ministry's quota, the source said.
The Finance Ministry is the largest shareholder in TMB, with a 25.9% stake, while ING has a 25% stake. Thanachart Capital holds a 51% stake in TBank and Canada's Scotiabank owns the remainder.
TMB is the country's seventh-largest bank, with assets of 892 billion baht, while TBank is sixth, with assets worth 1 trillion baht at the end of last year. The new entity would be the sixth-biggest bank after Bank of Ayudhya with an asset size of 2.1 trillion baht.
The ministry's cost per share of TMB averages 3.86 baht, well above the bank's market price of 2.26 baht yesterday.
The source said the due diligence process remains to occur and details about the merger are expected to be concluded within the next six months at the earliest.
Both banks have agreed in principle to the merger, but there are many details to iron out, including the number of staff and branches after the consolidation and how to manage the assets and liabilities of each bank, the source said.
Prasong Poontaneat, the finance permanent secretary, said recently that major shareholders of TMB and TBank were expected to sign a memorandum of understanding soon, inching towards a merger.
In principle, the merged entity will use TMB's name and TBank will no longer exist.