The sale by the state-owned Financial Institutions Development Fund (FIDF) of a 47.58% stake in Siam City Bank is the last opportunity for a foreign bank to enter the Thai market, given the government’s declaration that new licences are unlikely to be granted in the short term. The deal is also perhaps in another way the last opportunity for the bidders involved. With war chests of acquisition capital at the ready and managements eager to capitalize on the financial crisis to snap up opportunities, both Korea Development Bank (KDB) and HSBC have been looking to buy in Asia – with limited success so far.
“It’s not just the last chance in Thailand,” says an HSBC insider, “but perhaps for Sandy [Flockhart, Asia chief executive] and co to buy something in Asia while valuations are still down. Since the crisis began there’s been pressure to capitalize on HSBC’s strong position and buy up some local banks to plug holes in the platform, but for various reasons it hasn’t quite happened.”
One notable exception was HSBC’s $680 million acquisition of Bank Ekonomi in Indonesia, the source notes, but the bank would dearly love to expand its presence in the promising Thai market where for now it is confined to a single main branch.