Two rivals for HSBC in bid race

BANKING giant HSBC faces two rival parties in the bid race for Thailand's Bank of Asia, with a result likely as early as next week.

The battle pitches HSBC against Singapore's family-run United Overseas Bank (UOB). The third player could be Temasek, the Singapore government's investment arm, or a group led by Thailand's Government Pension Fund.

Still, of all the parties linked to the sale of Thailand's ninth-largest lender, only UOB has confirmed its interest.

Dutch group ABN Amro owns 80% of Bank of Asia, which it picked up during the regional financial crisis of the late 1990s. The controlling stake, valued at about £300m, went on the block last month as consolidation of the sector gathers pace.

'We've allowed three parties into the second round and we hope to come to a final choice by end-March,' a senior ABN Amro executive told reporters, mapping out the sale's timetable for the first time. The transaction should close by July.

The quick-paced deal stands in sharp contrast to the extended bidding for South Korea's much larger KorAm bank.

The lender, which attracted interested from HSBC, rival Standard Chartered and Singapore's Temasek, was eventually secured by Citigroup after many months of talks.

Thailand is garnering renewed interest from the world's top lenders. The economy is booming and the Government is orchestrating consolidation of the country's banking sector to raise the scale and competitiveness of its players.

Many foreign lenders already have a presence. Among them, UOB owns UOB Radanasin, the smallest of the country's banks, while Standard Chartered controls SC Nakornthon. HSBC has been in Thailand for more than a century but has yet to buy a local bank.

Temasek, which did not return calls seeking comment today, has become a more active regional investor in recent months.