TMB Bank and Thanachart Bank (TBank) say they have no plans to shed workforce and will relocate overlapping branches after their merger.
The consolidated bank will adopt a no-layoff policy, said Suphadej Poonpipat, chairman of the executive committee at Thanachart Capital (TCAP), adding that about 2,000 employees at each bank resign or retire each year.
TMB has 8,000 workers and 400 physical branches nationwide, while TBank has 12,000 employees and 512 branches.
The new bank will reshuffle staff to eliminate overlapping jobs and re-skill employees as needed. Overlapping branches will be relocated and remodelled to better suit customer needs, said TBank chief executive Praphan Anupongongarch.
TMB recently entered into a non-binding memorandum of understanding to consolidate with TBank through an entire business transfer with an estimated transaction value of 130-140 billion baht, forming the country's sixth-largest bank by assets.
The amalgamation is expected to be completed by year-end.
Under the plan, TMB will finance the transaction via a combination of debt and equity financing. Equity financing is expected to account for 70% of the transaction value.
TMB will allocate newly issued shares worth 50-55 billion baht to TCAP and Canada's Bank of Nova Scotia (Scotiabank) -- both TBank shareholders -- at a price of 1.1 times TMB's latest book value, and a further 40-45 billion worth of newly issued shares to major shareholders. Either an IPO or a private placement will be open to new or existing investors.
Upon the completion of the consolidation process, the three new major shareholders -- TCAP, Dutch bank ING and the Finance Ministry -- will hold a stake in the integrated bank of at least 20% of each, while Scotiabank will hold a significantly smaller stake before exiting later.
According to the major shareholder structure of both banks, the Finance Ministry holds a 25.9% stake in TMB and ING has a 25% stake. TCAP holds a 51% stake in TBank and Scotiabank owns the remainder.
Mr Suphadej of TCAP said TBank will divest itself of subsidiaries and investments, including Thanachart Securities, Thanachart Insurance, TS AMC Co Ltd, Ratchthani Leasing Plc and MBK Plc, to existing shareholders such as TCAP and Scotiabank to downsize assets before the merger takes place.
TMB chief executive Piti Tantakasem said the bank will hold extraordinary general meetings to seek shareholders' approval on the recapitalisation plan before conducting due diligence for a few months.
The bank has 3 million retail customers, of which half use mobile banking services. TBank's mobile banking users number 1 million.
The consolidation will create business synergies because TBank has strength in auto lending, Mr Piti said.
Chumpol Rimsakorn, the deputy permanent finance secretary, speaking on behalf of TMB's board, said the ministry's stake in the new bank will become clearer after due diligence is completed.
TMB shares closed on the Stock Exchange of Thailand Wednesday at 2.32 baht, up four satang, in trade worth 1.76 billion baht.
