BBL to seal PT Bank Permata deal in Q3

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  2. BBL to seal PT Bank Permata deal in Q3
BBL to seal PT Bank Permata deal in Q3

Bangkok Bank (BBL) expects to make payment for its acquisition of Indonesia’s PT Bank Permata in the third quarter this year.

The deal is seeking approval from both the Bank of Thailand and its Indonesian counterpart and the process is expected to be completed soon, said Chansak Fuangfu, executive director and senior executive vice-president. BBL has scheduled a shareholder’s meeting to approve the deal next month.

The country’s third largest bank by assets plans to make a one-time payment, using its retained profit for funding.

The bank does not need to increase capital to fund the deal, he said.

“We’re ready to pay for the share purchase and it will be a one-time payment,” Mr Chansak said.

BBL in December last year entered into a conditional share purchase agreement to buy an 89.12% stake in Indonesia’s PT Bank Permata in a deal worth US$2.7 billion (81.3 billion baht) from the UK-based Standard Chartered Bank, making the largest purchase of an overseas lender by a Thai bank. The acquisition aligns with its strategy to become a leading regional bank with a larger presence in Southeast Asia.

Previously, the bank said in a statement to the Stock Exchange of Thailand that the deal was expected to be completed this year, subject to approval and other conditions being satisfied. BBL plans to conduct a tender offer for the remaining stake later.

A local banking licence will allow the Thai bank to offer a full range of financial services in Indonesia.

The deal will pave the way for BBL’s international banking business to enter into small and medium-sized enterprise (SME) and retail areas, with the digital platform the main tool to tap SMEs and retail in Indonesia. Presently, wholesale banking is the main focus of BBL’s foreign networks.

Meanwhile, Predee Daochai, co-president at Kasikornbank (KBank), said the bank has applied for a foreign banking branch licence to Vietnam’s regulator and approval is expected this year.

The bank wants to upgrade from a representative office to a branch in Vietnam to pursue business expansion in the high-growth regional market. It plans to focus on wholesale banking rather than SME and retail banking.

Digital banking will be a key strategy to facilitate business growth in Vietnam under an offline-to-online concept.

Source: Bangkok Post | 14 January 2020