Two of Thailand’s top eight banks by assets are set to join forces this month: TMB Bank and Thanachart Bank (TBank). Finance minister Apisak Tantivorawong has long been an advocate of consolidation in order to create ‘champion banks’ better equipped to compete with larger foreign lenders and bigger banks in the region. Banker data shows that the two banks would have combined total assets of $56.7bn based on 2017 figures.
Under the new regime, which will lapse in 2022, merged banks can deduct corporate income tax and expenditures, depending on their size. The bigger the merged entity, the bigger the incentive, with banks more than Bt4000bn ($128bn) of assets deducting the most. This leaves great scope for Thailand’s top five banks, which range between $81.5m and $94.1bn in size, to breach the upper bracket in case of a merger.