BAY shareholders approve BTMU deal
Bank of Ayudhya (BAY) welcomes Japan's largest bank, the Bank of Tokyo-Mitsubishi UFJ Ltd (BTMU), as its new major shareholder, says Veraphan Teepsuwan, the chairman of Thailand's fifth-largest bank.
He said his bank stands ready to provide financial support in securing BAY's competitiveness amid intense regional competition in banking.
With the combined strength of BTMU and its parent, Mitsubishi UFJ Financial Group (MUFG), the world's fifth-largest financial institution, BAY will be able to draw upon a huge capital base to support local and regional expansion, said Mr Veraphan.
"With access to their capital base and global network, we'll be a lot stronger than our competitors, both at home and abroad," he said.
As well, it will create synergy between BAY's main strengths in retail and SME business and BTMU's strengths in corporate banking and multinational clients.
Mr Veraphan told a shareholders' meeting yesterday that BAY would benefit from the merger agreement in terms of an expanded customer base, stronger capital, financial support from the new major shareholder and an international standard of banking service.
Shareholders approved the merger plan, the transfer of assets at BTMU's Bangkok branch, BAY's capital reduction and then an eventual increase again.
The integration process will be completed in December 2014.
BTMU's Bangkok branch, the largest foreign bank in Thailand, has assets of 583 billion baht including a corporate loan portfolio worth 200 billion.
It has seen average net profit growth of 15% over the past four years.
BTMU's total customer base after 50 years of operation is 5,900 accounts.
"BTMU's strategy is to focus on Asean market expansion in preparation for the Asean Economic Community in 2015. It wants Thailand to be their regional hub," said Mr Veraphan. "BAY's strong performance and management team are two more reasons for the deal."
He said BTMU wants to keep BAY's stake at more than 51% for accounting reasons.
The shareholders agreed to keep the top five executives on the management team, including representatives of General Electric, BAY's former major shareholder. These include chief executive Janice Van and president Phillip Tan.
The name Bank of Ayudhya will be maintained, although BTMU or MUFG will likely be appended to it.
Shares of BAY closed on the Stock Exchange of Thailand at 38.25 baht yesterday, unchanged, in trade worth 600.13 million baht.