Tags: GE | Sell | Bank | Ayudhya

GE Said to Weigh Options Including Selling Bank of Ayudhya

Wednesday, 12 September 2012 08:32 AM

General Electric Co. is considering options including a sale of its $2.1 billion stake in Bank of Ayudhya Pcl, Thailand’s fifth-largest lender, said two people with knowledge of the matter.

GE, the world’s largest maker of jet engines, may contact potential buyers including Malayan Banking Bhd., said one of the people, who asked not to be identified as the deliberations are private. GE owns 33 percent of Bank of Ayudhya, which has a market value of over 200 billion baht ($6.4 billion), data compiled by Bloomberg show.

Bank of Ayudhya shares rose as much as 6.3 percent today, to the highest since November 1997, taking gains this year to over 50 percent. The shares have doubled since GE first invested $584 million in the lender in January 2007, paying 16 baht apiece. Maybank, which last year acquired Singaporean brokerage Kim Eng Holdings Ltd., has said it would consider buying a Thai lender.

“It would be good for Maybank if it’s true as it will give them a foothold in Thailand,” Lim Sue Lin, an analyst at HwangDBS Vickers Research Sdn., said of a possible purchase of Bank of Ayudhya. The Thai lender “is a good bank.”

Chief Executive Officer Jeffrey Immelt is shrinking the GE Capital unit after $32 billion of credit losses in the financial crisis. GE has sold at least $3.9 billion of assets so far this year, data compiled by Bloomberg show. The largest deal was the $2.5 billion sale of Business Property Lending Inc. to EverBank Financial Corp, announced in July.

Thai Ambitions

Bank of Ayudhya trades at 1.9 times book value, higher than the average of 1.71 times among publicly traded Thai banks, according to data compiled by Bloomberg.

“We regularly evaluate our strategic options for our investments,” GE Capital said in an e-mailed response to questions from Bloomberg News. “In the meantime, we continue to work closely with the Bank to strengthen its business franchise.”

Maybank officials weren’t immediately able to comment.

Maybank, Malaysia’s biggest lender, will consider buying a retail bank in Thailand to expand its operations in Southeast Asia, CEO Abdul Wahid Omar said in August last year. Maybank bought Kim Eng for $1.4 billion in 2011, and has also made investments in lenders in Vietnam and Pakistan.

Loan Expansion

Since GE’s investment, Bank of Ayudhya has expanded its retail banking business by acquiring credit card and consumer loans businesses from GE Capital, American International Group Inc. and HSBC Holdings Plc. The lender’s net income jumped 23 percent to 7.13 billion baht in the first half from a year earlier.

Thailand’s economy has recovered this year as consumption rebounded following last year’s floods, and the government forecasts growth will reach 6 percent for 2012. Loan expansion accelerated to 14.2 percent in the second quarter and non-performing debts fell, according to Bank of Thailand.

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Wednesday, 12 September 2012 08:32 AM
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