Maybank seen as BAY suitor | Bangkok Post: business

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Maybank seen as BAY suitor

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The potential exit of General Electric Co from Thailand's banking industry is giving Malayan Banking Bhd the chance to claim a foothold in Southeast Asia's second-largest economy. 

GE may sell its 33% stake in Bank of Ayudhya Plc (BAY), sources with knowledge of the matter said last week.Tisco Securities says the sale may create an opening for a foreign takeover of the entire bank, which is the most profitable lender among the 11 SET-listed Thai banks based on net interest margins.An acquisition of BAY, which has a market value of $6.9 billion, would be the country's largest bank deal, according to data compiled by Bloomberg. As a top issuer of credit cards and personal loans in Thailand, Bank of Ayudhya may more than double its profits by 2014 as consumer borrowing outpaces demand for credit from businesses, according to Citigroup Inc.Amid rising car and home purchases, loan growth at BAY accelerated to 14% in the second quarter.While the Bank of Thailand needs to give permission for any takeover, Maybank's eagerness to expand in Southeast Asia makes it likely to bid for the entire bank, said analysts at ECM Libra Capital Sdn."Bank of Ayudhya is an attractive takeover target," said Peach Patharavanakul, an analyst at Tisco Securities. "Thailand's economy now is a story of domestic demand and consumption. Bank of Ayudhya is one of the best bets on this story."Maybank said in an e-mail that it would not comment on market speculation. However, in an interview with CNBC last Friday, CEO Abdul Wahid Omar said he wanted to acquire a Thai retail bank."It will be great if we can have a domestic retail and commercial banking presence in Thailand," he said in the interview.He said Maybank was keen to expand in Thailand, though didn't say whether the bank would bid for GE's stake.BAY executives have referred all questions to GE Capital in Singapore, which said in an e-mail that "we regularly evaluate our strategic options for our investments".Formed in 1945 and listed on the SET in 1977, BAY has counted GE as its top shareholder since 2007, when the US company acquired a 29% stake, later lifting it to 33%.That investment preceded at least eight takeovers by BAY, including purchases of businesses from GE, American International Group and HSBC Holdings Plc. Those deals turned Bank of Ayudhya into the country's top or second-ranked provider of credit cards, car loans and personal finance, bank filings show. It has 600 branches across Thailand."GE has successfully transformed Bank of Ayudhya into one of the country's top lenders, especially in retail banking," said Sasikorn Charoensuwan, head of research at Phillip Securities (Thailand) Plc."For any overseas lenders that want to expand in Thailand, Bank of Ayudhya will be a very...

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