Siam City Bank to wait for 'Mr Right'

Business News - Friday December 14, 2007

Siam City Bank to wait for 'Mr Right'

FIDF likely to open bidding next year

DARANA CHUDASRI

Despite meeting numerous suitors, Siam City Bank executives say they are in no hurry for a strategic investor and would prefer to wait for ''Mr Right.'' The Financial Institutions Development Fund is expected to open formal bidding for its 47.5% shareholding in Siam City Bank possibly next year.

But Chaiwat Uthaiwan, the SCIB president, said there was no urgency to close a deal.

''The FIDF certainly isn't pushing us to find a partner,'' he said. ''Any deal needs three elements: transparency, a strategic partner who will help the bank and the Thai financial system, and the right price.''

Mr Chaiwat said he hoped to bring in a new strategic partner within the next three years to help SCIB strengthen its operations in an increasingly competitive environment.

''We are facing a number of challenges, both from inside and outside. We're ready in certain aspects, but our competitors aren't going to stay still,'' he said.

Over the past nine months, Mr Chaiwat said, he had met with 20 financial institutions that had expressed interest in purchasing a shareholding in the bank.

No single one was perfect, he said. SCIB was seeking a unique mix that included expertise in small business and retail banking, a strong technology platform and know-how.

''A deal will depend on the FIDF. Do they want to wait or move forward with a sale,'' Mr Chaiwat said.

''The world is changing, and so is the Thai banking industry,'' he added. ''Foreign shareholders already hold a large stake in almost every bank.''

Foreign shareholders now hold up to the 25% legal limit in SCIB, as well as a 15.59% stake through non-voting depository receipts. The bank's float among Thai retail investors is just 11.83%.

Mr Chaiwat said SCIB's three-year business plan aimed to improve customer relationships, distribution channels and product offerings.

For 2008, the bank projects new lending of 30 billion baht, or 12% growth, a target that is double that of this year. The small and medium-sized business and retail segments are projected to rise to 58% of total loans from 51% now.

Mr Chaiwat said the bank also hoped to increase fee income growth to 22% next year compared with flat growth this year. Non-performing loans are also expected to drop to under 4.5% of total loans in 2008 compared with 8% at the end of the third quarter.

SCIB shares closed yesterday on the Stock Exchange of Thailand at 14.90 baht, up 10 satang, in trade worth 30.9 million baht.

Bangkok Post