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UPDATE 1-Scotiabank approaches BOC unit, other lenders for Thai bank stake sale-sources

Published 2016-02-23, 02:05 a/m
Updated 2016-02-23, 02:10 a/m
© Reuters.  UPDATE 1-Scotiabank approaches BOC unit, other lenders for Thai bank stake sale-sources

© Reuters. UPDATE 1-Scotiabank approaches BOC unit, other lenders for Thai bank stake sale-sources

* Biggest Thai bank deal since MUFG bought Bank Ayudhya 2013
* Japanese, Malaysian, Taiwanese banks approached-sources
* Scotiabank 's strategy to exit Asia retail business-source

(Adds detail on Scotiabank , quote from source)
By Saeed Azhar and Denny Thomas
SINGAPORE/HONG KONG, Feb 23 (Reuters) - Canada's Bank of
Nova Scotia BNS.TO has approached a unit of Bank of China
601988.SS , Maybank MBBM.KL and two Japanese banks to gauge
their interest in its $1.7 billion stake in Thai lender
Thanachart, people familiar with the matter said.
Bank of Nova Scotia, known as Scotiabank, has hired Morgan
Stanley MS.N to advise it on the sale of the 49 percent stake,
the sources said. First-round bids for the sale are expected in
the second quarter, one of the people added.
Scotiabank is the latest mid-sized Western bank in Asia to
rethink its strategy in the face of headwinds from low growth in
China, depressed commodity prices and falling interest rates.

The Canadian lender had flagged it was reviewing its
Thanachart stake in December. One of the sources said it wants
to exit its retail presence in Asia and focus mainly on
corporate banking in the region through a few key offices.
Thanachart Capital Pcl TCAP.BK owns the remaining 51
percent stake in Thanachart.
"This is a fairly sizeable ticket and if they were to sell
it close to where previous transactions have happened - two
times book value - the Chinese look to be the only ones who have
the capacity," said a banker familiar with the sale process who
declined to be named as the matter remained confidential.
Bank of China's unit BOC Hong Kong 2388.HK is showing
interest in the stake, one of the sources said. The bank has
said it was keen to expand outside China.
Morgan Stanley (N:MS) has also approached Taiwan's Fubon Financial
Holdings 2881.TW , Japan's Mizuho Financial Group 8411.T and
Sumitomo Mitsui Banking Corp (SMBC), a unit of Sumitomo Mitsui
Financial Group 8316.T , the sources added.
Asked about the deal, Scotiabank spokesman Marcelo
Gomez-Wiuckstern said: "No final decision has been made with
respect to this investment."
Thanachart Bank declined to comment and the sources declined
to be identified as the details of the deal remained
confidential. Morgan Stanley did not respond to requests for
comment, while the two Japanese banks, BOC Hong Kong, Maybank
and Fubon all declined to comment.
Canada's most international bank spent C$510 million ($365.8
million) to build its stake in the unlisted Thai bank over the
past eight years, but investors have recently raised concerns
over its exposure to emerging markets, putting its stock under
pressure.
Growth in Thanachart Bank's loan books has slowed since late
2013, hit by weak auto sales.
If the sale goes through, it would be the biggest bank deal
in Thailand after Japan's Mitsubishi UFJ Financial Group
8306.T bought a controlling stake in Bank of Ayudhya Pcl
BAY.BK for up to $5.6 billion three years ago.

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