Thai Bank Is Open to Merger as It Grows Wealth Business

(Bloomberg) -- Kiatnakin Bank Pcl, one of Thailand’s smallest publicly traded lenders, is open to a merger as competition from other banks and technology firms intensifies.

The bank plans to expand its wealth management business, while being more cautious with automobile loans, one of its biggest lending areas, President Philip Chen Chong Tan said in an interview on Monday. Thailand’s aging population has boosted demand from senior executives and retirees to manage their wealth, he said.

Thailand has offered tax incentives for domestic banks to combine to bolster their competitiveness and financial strength. DBS Group Holdings Ltd. and Julius Baer Group Ltd. are among global wealth managers that have expanded in Southeast Asia’s second-biggest economy to tap the rising number of millionaires there.

“I’m sure there will come a time when the opportunity for consolidation presents itself with the right partner and price,” Tan said. “We’re trying to focus on improving our operation and business such as wealth management so we can add more value when that opportunity comes.”

Other lenders are heeding the government’s calls to combine. TMB Bank Pcl, of which the finance ministry and ING Groep NV are the biggest shareholders, is completing a merger with Thanachart Bank Pcl to create the nation’s sixth-largest lender.

Earlier this decade, Kiatnakin merged with Phatra Securities, one of Thailand’s top investment banks.

The Bangkok-based lender will use its network of 65 branches nationwide to boost its wealth management business, especially finding new customers outside of the capital, said Tan. Under Phatra Securities, Kiatnakin helps manage about 600 billion baht ($19.6 billion) of assets for high-net worth individuals, he said.

Kiatnakin’s shares dropped 9% in September, the biggest decliner among 11 listed commercial banks, according to data compiled by Bloomberg. The gauge of commercial banks declined 1.8% in the period.

--With assistance from Lee Miller.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editors responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net, Russell Ward

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