State-owned Government Savings Bank has bought a 25% stake in online securities broker ASL Securities, marking GSB's first venture into the securities business and opening the door for the 106-year-old bank to offer a full array of financial services.
Before making its way to investing in the securities business, GSB held 24.94% and 25% stakes in MFC Asset Management and Thanachart Fund Management, respectively, both of which are identified as asset management companies.
"It is a win-win situation because the bank has a customer base while ASL has the technology," said GSB president and chief executive Chatchai Payuhanaveechai. "ASL has been established via an online securities platform for a few years."
Banks should have a full-range of financial services, including mutual funds, securities and insurance, to offer to customers, Mr Chatchai said.
This investment will boost the bank's fee income and help expand the online customer base, he said, without disclosing the investment value.
The company has paid-up capital worth 580 million baht and will increase the sum to 696 million baht tomorrow.
According to the existing shareholder structure, Venture Cap holds a 46% stake in ASL, followed by GSB (25%), Suchart Sethiwan (9%), Phongchai Sethiwan (5.5%), Chockchai Sethiwan (5.5%), Charnchai Kultavarakorn (5%) and Samitta Jearpaitoon (4%).
The company's business operations became effective in 2015 after receiving a securities business licence from the Finance Ministry a year earlier. The company is known for developing securities trading via the internet.
GSB's acquisition of ASL shares marks a strategic business expansion plan for both entities, said a capital market source speaking on condition of anonymity.
"GSB has selected ASL because the company is an online brokerage firm," the source said. "The bank probably wants to have integrated online products, and its MyMo mobile banking app is on a par with the apps of other banks."
The bank has a large customer base of deposits, but it previously did not have a securities business under its wings. This prompted GSB to acquire ASL shares in a bid to preserve the existing customer base and build up integrated financial services such as financial advisory and wealth management, the source said.
ASL can also serve GSB's customers by managing investment portfolios, the source said.