Taiwan's CTBC set for large slice of LH Bank
CTBC Bank Co Ltd, one of the largest privately owned financial institutions in Taiwan, is expected to acquire a sizeable stake worth 16.6 billion baht in Thailand's LH Financial Group (LHFG) soon.
Further revenue would be generated through gradual offerings of shares under the supervision of both the Bank of Thailand and its Taiwanese counterpart, said LH Bank president Sasitorn Pongsathorn.
A meeting of LHFG's shareholders earlier this month approved the share acquisition deal that will allow CTBC to acquire 7.55 billion, or 35.6%, of newly issued LHFG shares at a price of 2.20 baht per share for 16.6 billion baht.
Upon the completion of acquisition, two Taiwanese and one independent director will be appointed to sit on the CTBC Bank's board of directors.
The number of Taiwanese and independent directors will be increased to three and two, respectively, next year.
A Taiwanese desk handling trade finance and wealth management -- areas in which CTBC excels -- will also be set up to tap customers from that country.
The new business unit, however, is subject to the Bank of Thailand's approval before its operation could officially kick off.
Wealth management services will be available soon, while trade finance service is scheduled to begin early 2019, when the number of Taiwanese officials in the Thai bank is expected to reach 30.
LH Bank's business direction will be reassessed by both Thai and Taiwanese executives after the acquisition is completed and a business plan is expected to be unveiled by the year-end, Mrs Sasitorn said.
CTBC, with a representative office in Thailand, had been on the lookout for opportunities to expand its business in Thailand for two decades, but its efforts to forge partnerships with several local banks had failed in the past.
"CTBC chose us because of our offer for a 35.6% stake at a reasonable price, coupled with a high potential for growth and the reputable quality of our bank's assets," said Mrs Sasitorn.
LHFG recorded a net profit of 617 million baht for the second quarter of 2017, down 23.1% year-on-year. Its total assets amounted to 217 billion baht as of June, an increase of 2.2% from the end of last year.
LH Bank's non-performing loans were valued at 2% of its outstanding loans at 146 billion baht at the end of June.
LHBANK shares closed Friday on the SET at 1.80 baht, up one satang, in trade worth 25.2 million baht.