Thailand-based TMB Bank and Thanachart Bank have signed a non-binding agreement to merge their banking activities.

The deal may value up to THB140bn ($4.47bn) and is expected to create the sixth largest bank in the country.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

The TMB-Thanachart merger is primarily driven by the government’s announcement of tax incentives for bank mergers.

Such mergers are expected to create stronger lenders and increase competition in the the country’s banking sector.

TMB-Thanachart merger: Details

Under the terms of the agreement, TMB will acquire Thanachart Bank through a combination of debt and equity.

It will issue new shares valuing 70% of the total deal, Reuters reported citing company statement.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Thanachart Capital holding owns a 51% stake in Thanachart Bank, while the remaining 49% stake is with Canada’s Nova Scotia Bank.

TMB shares worth around THB50bn-THB55bn will be issued to Thanachart Capital as a part of the deal. Nova Scotia Bank will receive shares worth THB40bn-THB45bn.

Once completed, Dutch banking group ING, Thanachart Capital and the Thailand government will be major shareholders in the merged entity. Nova Scotia is expected to continue to hold a smaller interest in the merged entity.

It is estimated that the merged entity will have assets of THB1.9 trillion with around ten million retail customers.

Additionally, the combination will result in deposits and retail lending synergies. It will also help the combined bank to raise funds more efficiently and achieve greater economies of scale, added Reuters.

Currently, the Thailand government owns a 25.92% stake in TMB and ING holds another 25%.