TMB and TCAP on the Rise! Combined Bank to Rank No.6 in Thai Banking Industry
The merging process of TMB and TCAP advances at a fast pace, while TMB has announced that the transactions in this investment would be approximately 130-140 billion baht.

27 ก.พ. 2562

TMB Bank Public Company Limited (TMB) hiked ฿0.06/share or 2.63% to ฿2.34/share with ฿854 million in value. Meanwhile, Thanachart Capital Public Company Limited (TCAP) rose ฿1.25/share or 2.35% to ฿54.50/share with ฿314 million in value.
Both companies’ shares are on the rise due to the merging news between TMB and TCAP as well as the recent update from TMB of a transaction worth 140 billion baht.
 
On February 26, 2019, TMB Bank Public Company Limited (TMB) had announced that TMB entered into a non-binding Memorandum of Understanding (MOU) with Thanachart Bank Public Company Limited (TBANK), ING Groep N.V. (ING), Thanachart Capital Public Company Limited (TCAP) and The Bank of Nova Scotia (BNS).
This was to set out the non-binding agreement in principle of the parties and form the basis for further discussion in relation to series of transactions to be entered into by the parties with the objective of merging TMB and TBANK, creating a larger bank (Combined Bank).
 
Prior to the Merger, TBANK would undergo a restructuring to reinforce TCAP’s strong position as a financial holding company and to ensure that business operation of the Combined Bank is in line with the current business direction of TMB.
The combination of TMB and TBANK would significantly enhance the scale of the Combined Bank’s business making it one of the leading banking franchises in Thailand. The Combined Bank would have total assets of approximately 1.9 trillion baht and more than 10 million retail customers, thereby ranking number six in the Thai banking industry.
 
TMB and TBANK have strengths that complement each other. TMB’s strength in deposit franchise from its innovative deposit products and TBANK’s strong market position in retail lending portfolio (especially, its hire purchase portfolio) would enhance the Combined Bank’s ability to acquire deposits from an enlarged customer base and create a well-balanced loan portfolio.
 
TMB expects the total consideration for the Transactions to be approximately 130-140 billion baht, subject to final adjustments as a result of due diligence findings and the latest book value of TBANK and its subsidiaries. In consideration for the Transactions, TCAP and BNS are expected to receive the consideration in cash, a part of which will be reinvested in TMB.
Following the Transactions and the equity financing, ING, Ministry of Finance and TCAP are expected to be the major shareholders in the Combined Bank with ING and TCAP having respective shareholdings above 20%. BNS is expected to hold a significantly smaller stake.
 
TMB intends to finance the Transactions via a combination of debt and equity financing. It is expected that the equity financing would account for about 70% of the total value of Transaction.
Part of the new equity capital would be approximately 50-55 billion baht be in the form of newly issued TMB shares issued to TCAP and BNS. The newly issued TMB shares that would be issued to TCAP and BNS would be expected to be issued at 1.1x of TMB latest available book value adjusted for the capital raise and any adjustment that may be agreed and set out in definitive documentation.
The remaining 40-45 billion baht of new equity capital would be raised via a capital raise to existing shareholders with the support of the current major shareholders and may include a public offering and/or private placements to new or existing investors. TMB intends to maintain a sustainable capital position following the Transactions.
 
Today, February 27, 2019, TMB will hold a Special Analyst Meeting titled “Synergies for Growth” at 15:30 – 16:30 for analysts and fund managers. 
 