Questions are mounting within Thailand’s financial community regarding the latest phase of TMBThanachart Bank Public Company Limited’s (SET: TTB) multi-round share buyback program. While share buybacks are widely accepted tools to optimize equity structures, the specific execution method chosen for this tranche has sparked debate among market observers over corporate governance and the equitable treatment of all shareholders.
Historically, TTB structured its buybacks using an “Automatic Matching” method, acquiring shares directly from the open market. Under open-market matching, the buyer remains blind to the identities of the selling counterparties. However, for this final round, TTB opted for a “General Offer” mechanism—effectively setting up a formal buying desk at a locked price of THB 2.26 per share.
The shift in strategy aligns precisely with a significant disposition by one of TTB’s longest-standing major shareholders, ING Group. Recent filings reveal that ING sold a 4.4635% stake in TTB, amounting to over 4,080 million shares. Reports have circulated for years regarding ING’s intention to exit its investment in the bank following its historical merger with Thanachart Bank. However, a full exit on the open market had been delayed due to market price constraints.
The General Offer framework is speculated to provide ING with an efficient exit vehicle, allowing the group to liquidate a massive, single block of shares at a guaranteed price of THB 2.26. This transaction values the block at more than THB 8,000 million. Had a block of this size been unloaded via standard open-market automated matching, achieving a uniform, premium price would have faced immense downward pressure.
From a technical financial perspective, treasury stock buybacks yield positive indicators by reducing the total outstanding share count, thereby driving up Earnings Per Share (EPS) and Return on Equity (ROE). Yet, the immediate liquidity benefits of this transaction have been heavily concentrated. While ordinary retail shareholders must wait for long-term financial statements to reflect incremental per-share changes, ING secured immediate, multi-billion baht liquidity.
This structural setup introduces critical corporate governance inquiries. Under the Financial Institution Business Act and the Bank of Thailand (BOT) regulations governing asset acquisitions and depositions between commercial banks and major stakeholders, strict compliance is required. Legally, such transactions are permissible provided they secure explicit approval from the central bank. However, the ethical boundary under “Good Governance” remains a distinct focus.
Furthermore, legal precedents concerning shareholders with a “special interest” state that individuals or entities deriving benefits exceeding those of ordinary shareholders are generally restricted from voting on associated corporate policies. Because ING maintains active representation on TTB’s Board of Directors, questions arise regarding the internal process that approved a General Offer buyback structure that directly absorbs a major board member’s assets.
The Ministry of Finance of Thailand remains another major stakeholder in TTB, holding representative seats on the bank’s board. The apparent silence from fiscal representatives and regulatory bodies like the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) has caused market observers to question who truly extracts the highest immediate utility from TTB’s capital allocation strategies.
