Bank of Nova Scotia is purported to be reviewing its 49-percent stake in Thanachart Bank – eight years after it first invested in the Thai bank – which could result in a partial or complete exit of the investment.
According to Scotiabank’s latest annual report, the Thanachart Bank stake carries a value of $2.4-billion on the Canadian bank’s balance sheet. It first bought 25 percent of Thanachart Bank in 2007 for $240 million. Two years later, it spent an additional $270 million to increase its stake to 49 percent – which is the regulatory limit for a foreign bank in Thailand.
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A formal sale process could start early next year if Scotiabank decides to proceed with a divestment.
Scotiabank has other Asian operations in Japan, Korea, India, Vietnam and China – where it holds a minority stake in Bank of Xi’an. In 2011, it sought to expand in China with a bid to buy 20 percent of Bank of Guangzhou. However, it dropped the deal in July 2013 when political changes affected negotiations.
The Canadian bank has recently been prioritising expansion in Latin America over Asia, where it is hampered by ownership restrictions.
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