It chose to invest because it believed that the merger would yield a more efficient bank.
Reuters reports that the Thailand government will invest $318m (THB10b) to buy newly issued shares in the entity formed by the merger between TMB Bank and Thanachart Bank.
According to finance minister Apisak Tantivorawong, the government is investing because the new bank would be more efficient. The move comes after the Thai government approved tax incentives for bank mergers to help them better compete with their larger regional rivals.
The merger will have a combined asset of $60b (THB1.9t) and around 10 million retail customers.
The government currently holds a 25.92% stake in TMB Bank, whilst Dutch banking group ING Groep NV owns 25% of the bank’s shares. Meanwhile, Thanachart Capital Pcl owns 51% of the stakes in Thanachart Bank, whilst a unit of Canada’s Bank of Nova Scotia owns the remaining shares.
Here’s more from Reuters.
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