Scotiabank doubles stake in Thanachart Bank

Scotiabank, one of Canada's largest banks, has paid Bt7.6 billion ($217 million) to increase its stake in Thailand's Thanachart Bank to 49%. The acquired 24%, which consists of 416 million shares, takes the Canadian bank to the regulatory limit for foreign ownership of Thai banks.

"The Thai market has solid fundamentals with good long-term growth prospects," says Rob Pitfield, group head, international banking at Scotiabank. "Scotiabank's increased investment in Thanachart Bank is a great opportunity for us to capitalise on the strength of the Thai market and on the strong relationship that we have already built with Thanachart Bank."

The majority shareholder remains Thanachart Capital Public Company, which holds 50.9%. The remaining 0.1% belongs to retail investors. Along with the increased stake for Scotiabank comes more control, as Scotiabank will go from two representatives to three on Thanachart's board of directors. 

Thanachart is Thailand's eighth largest bank by assets, with a focus on automobile lending. Its plan is to remain strong in the area of car finance while at the same time diversifying into other lending areas, such as corporate finance. It already has 215 branches in Thailand and intends to open another 40 by the end of 2009.

For a Canadian bank, Scotiabank has a large footprint in Asia-Pacific, operating in 11 different countries in the region. Its Asian business has focused on corporate and commercial services, such as loans, trade finance, treasury and foreign exchange.