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  1. #1
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    China's Largest Bank Eyes Thailand

    Banking

    China's Largest Bank Eyes Thailand
    Hana R. Alberts
    09.30.09

    ICBC inches toward its goal -- global expansion -- by offering $544 million for a Thai bank.

    HONG KONG -- In its latest attempt to become a global operation, China's largest bank moved Wednesday to take over a small lender in Thailand.

    The Industrial and Commercial Bank of China (ICBC), the country's largest lender by market capitalization and total profits, announced late Tuesday that it would purchase Bangkok Public Bank Company's entire stake--19.3%--in Thailand's ACL Bank. At the same time, according to a statement, ICBC will extend an offer to all of ACL Bank's shareholders to buy out all of their holdings at the same price, 11.50 baht (34 cents) per share. That amounts to about $544 million.

    ICBC oversees $1.7 trillion in assets and operates 16,320 outlets in mainland China as well as 143 overseas branches and subsidiaries, including in Indonesia, Hong Kong, Macau and Singapore, the statement said.

    By contrast, ACL Bank, which is based in Bangkok and caters to businesses, boasts total assets, loans and deposits of $1.9 billion, $1.4 billion and $1 billion respectively.

    "It's good for ICBC," said May Yan, China bank analyst for Nomura Securities. "ICBC's strategy to buy banks in emerging markets in particular, and this is ICBC's big ambition, to go global. And it follows their clients, to go to countries that they do business. This is no surprise."

    The deal has been in the works for a long time, Yan said, and benefits ICBC by not only adding Thai customers to their roster but offering more services to their Chinese customers who do business there.

    In June, ICBC announced a share swap that won it a stake in the Bank of East Asia ( BKEAF - news - people ) in Canada. To break into another emerging market, South Africa's, ICBC bought a 20% stake in Standard Group, and it also bought Bank Halim in Indonesia last year. Even as consumption and demand in China remains strong as a result of a hefty stimulus package and lenient bank landing, ICBC is looking to other markets.

    "This transaction will be of great significance to ICBC in the expansion of its business and network in the Mekong River region and also the South East Asia region," ICBC's chairman, Jiang Jianqing, said in a statement.

    In the first half of 2009, even after seeing a drop in income, IBC's total assets increased, as did total loans and advances to customers, according to a Sept. 29 report on its 2009 interim results.

    In what has been called the biggest IPO ever, Beijing-based ICBC raised $22 billion on the Hong Kong stock exchange in 2006.

    Chinese investors Wednesday had mixed opinions on the deal. ICBC has A-shares on the Shanghai Stock Exchange and H-shares on the Hong Kong stock exchange. In afternoon trading, the A-shares edged up 0.6% to 4.77 yuan (70 cents) and H-shares slid 1.3% to 5.86 Hong Kong dollars (75 cents). Meanwhile, ACL Bank's share price soared to 10.70 baht (32 cents), up 7%.

    Aided by government funds that have helped shore up their balance sheets and kept monetary policy loose, ICBC's main competitors for market share are the Bank of China and China Construction Bank. ICBC also ranked 147th on the Reputation Institute's list of the world's 600 most reputable companies.

    The transaction is pending approval from ACL Bank's shareholders as well as Chinese and Thai regulators.

    forbes.com

  2. #2
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    Three month ago I asked in an other forum "Is Abhisit going to sell a Thai bank to China ?". The tricky part was highlighted in The Nation :

    "Virachai said ICBC was keen to take more than 49 per cent of Thailand's ACL Bank but Thai law caps foreign shareholding in Thai businesses at 49 per cent.

    ICBC also asked the premier to consider raising to 50 per cent the current 25-per-cent limit on foreign directors on any board.

    ICBC has expressed interest in such a deal for years, but it has delayed in expectation of a revision of the foreign share-ownership level in a bid to seek control of management.

    Abhisit said he would ask the Finance Ministry to consider the request, which he said would depend on whether the entry of ICBC would increase competition within Thailand's banking sector, which would narrow the spread of the interest rate.

    The other issue the finance ministry will consider is whether the entry of ICBC would make financial services in Thailand more widely accessible to Thais.

    "The Thai PM said the central bank and Finance Ministry had known of the proposal for several years and would consider it positively way," Virachai said."

    Chinese seek greater say in Thai banks - Nationmultimedia.com


    It seems I got my answer, Abishit is selling out Thailand to China. But I don't expect the poor falangs to be able to own their home in Thailand any time oon
    The things we regret most is the things we didn't do

  3. #3
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    China’s ICBC May Tender for Thailand’s ACL in January, Korn Says
    Anuchit Nguyen

    Oct. 26 (Bloomberg) -- Industrial & Commercial Bank of China Ltd., the world’s largest by value, may make a tender offer in January to buy Thailand’s ACL Bank Pcl, Thai Finance Minister Korn Chatikavanij said.

    “ICBC is in the process to get approval from related government agencies in China for its planned investment in ACL,” Korn told reporters in Bangkok today. “So ICBC is expected to make a tender offer for ACL Bank’s remaining stake in January because the process needs time.”

    bloomberg.com

  4. #4
    Out there...
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    It's amazing what big business can do....

  5. #5
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    I thought the thread was going to be about a bank buying ALL of Thailand.

  6. #6
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    Quote Originally Posted by crippen View Post
    I thought the thread was going to be about a bank buying ALL of Thailand.
    You're going too fast. That's the second step.

    Fist step is to established a reliable bank which is then going to finance the Chinese to buy what they don't already own.

    Anyway Thailand had always relied on the Chinese to run the country, I don't expect any big difference, maybe just more efficiency.

  7. #7
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    ^^ The Chinese already own Thailand.

  8. #8
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    The only Thai bank that is not already controlled by ethnic Chinese is SCB. I guess they'll fit right in.

  9. #9
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    Quote Originally Posted by Smug Farang Bore View Post
    ^^ The Chinese already own Thailand.
    ....and everyone else. The world is just becoming awakened to this. It's their turn again - historic cycles.

  10. #10
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    Quote Originally Posted by sabang View Post
    The only Thai bank that is not already controlled by ethnic Chinese is SCB. I guess they'll fit right in.
    Needless to say, we know what entity pulls the strings at Siam Commercial.

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