TMB a Strong Buy as ING Make Offer
TMB is one of Thailand’s major Bank’s and rates a very strong buy in the current market. Financial ratios are improving and ING is attempting to buy a 26% stake in the bank from the Thai Government.
Boontuck Wungcharoen, TMB’s chief executive, said the bank’s capital adequacy ratio now stood at 16%, almost double the central bank’s minimum requirement of 8.5%.
TMB booked a net profit of 3.26 billion baht last year, up from 1.94 billion in 2009.
Mr Boontuck said the bank had targeted loan growth of 10% this year, an aggressive goal to be supported mainly by the improving economic environment.
Thailand’s economic growth is forecast at 3.5% to 4% this year.
The improved performance would prompt TMB’s board to propose a dividend payment at the shareholders’ meeting in April, said Mr Boontuck.
“If the board approves, it will be the first dividend in 14 years,” he said, adding that TMB projected an increase in its return on equity to 14% by 2014, more than double the present 6.7%.
With the robust economic recovery, TMB expects a steady reduction in its non-performing loans from 7.7% now to 6% by year-end. That reduction will be due to good management, as TMB has no plans to sell off any NPLs, which now amount to 33 billion baht.
TMB shares closed yesterday on the Stock Exchange of Thailand at 2.24 baht, up two satang, in trade worth 653 million baht.
ING is the only bidder for the Thai Finance Ministry’s shares in TMB Bank, TMB chairwoman Saowanee Kamolbutr confirmed.
The Thai Finance Ministry holds a 26.1% stake and been in negotiations with ING, ING currently hold a 25.2% stake in TMB.
ING also holds TMB shares through non-voting depository receipts.
The ministry wants to divest its shares in TMB, a decision that has attracted interest from foreign investors.
Reports are that CIMB Group, the Industrial and Commercial Bank of China and the Korea Development Bank are among those keen to invest in a Thai bank, however ING is the only party currently in negotiations.
Mrs Saowanee said TMB showed an improved financial position in terms of both results and capital and can operate smoothly under current conditions.
Shayne Heffernan www.livetradingnews.com
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