Bangkok Bank’s Landmark Deal Opens Path To Southeast Asian Expansion

This story appears in the July 31, 2021 issue of Forbes Asia. Subscribe to Forbes AsiaBangkok Bank’s $2.7 billion acquisition of Bank Permata is not only the largest by value in the 76-year history of the bank, it is also one that promises to be transformative. The deal will change Bangkok Bank from a major Thai bank with a good Asian network into one that has a strong foothold in two of Southeast Asian’s most important economies—laying the groundwork for years of sustainable growth. It is also a personal milestone for Bangkok Bank president Chartsiri Sophonpanich, 62, allowing him to fortify his family’s legacy and enhancing the bank’s regional aspirations pioneered by his grandfather Chin, the cofounder and first president of the bank in 1944.“Normally we grow organically,” says Chartsiri in a video call from his office at the bank’s Silom Road headquarters in a rare interview. “We don’t grow by acquisition.” Yet the opportunity in Indonesia—one of the world’s largest and fastest-growing economies—was too good to pass up. The widely watched move in Asian bank consolidation comes as Thailand’s commercial banks look elsewhere for growth as headwinds at home weaken profitability. First announced in December 2019 in a conditional offer, Bangkok Bank in May last year completed the purchase of an 89% stake in Bank Permata from Standard Chartered and Jardine Matheson’s Indonesian subsidiary Astra International. It then upped that amount to 98.71% after a mandatory tender offer in October. The two banks’ Indonesian branches were officially integrated in December last year. Bank Permata, which operates under the name PermataBank, gives Bangkok Bank some 4 million new customers, 300 nationwide branches, and adds about $13.8 billion to the bank’s asset base, which stood at roughly $126 billion in total assets in the first quarter. More significantly, it boosts its position as the go-to lender to support clients’ own ambitions in the region. “PermataBank was a strategic acquisition,” says Chartsiri.“The regional market is growing much more strongly than Thailand and with international [loans] accounting for more than 24% of our portfolio, we can expect this to support our ongoing growth.”It’s a bold move for the soft-spoken third-generation head of Thailand’s largest bank by assets to reinvigorate growth. After early years of moving at breakneck pace under Chartsiri’s father and grandfather, the bank has struggled with momentum in its home market in the face of slowing economic growth, high household debt and low interest rates. The pandemic dealt a further blow to Thailand’s tourism-reliant economy, with smaller businesses among the hardest hit—a third wave of infections has dampened hopes of a quick or steady recovery. “People are quite cautious and also very careful about their spending,” says Chartsiri, who ranks No. 32 on this year’s Thailand’s 50 Richest with a net worth of $1.15 billion.

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