TMB Bank : bad timing for the dutch ING

Bad target. And very, very bad timing. ING has been overconfident.

Well… difficult to blame them… All the financial world was dangerously overconfident.

Anyway, when the dutch financial company ING bought a stake in TMB last october, I wrote a couple of… critics (here and there). With an ironic end : “good luck“…

A few month after… well… ING still needs good luck… ๐Ÿ˜‰

On paper at least, the results have been anything but rosy. Since the beginning of the year, shares of TMB Bank have dropped nearly 20%, compared with an 11% fall in the main share index.

ING is currently facing more than a 25% loss on its 460 million investment in TMB late last year, as global market conditions have turned decidedly more pessimistic over the past few months. Certainly the Dutch financial services giant faces an uphill battle in achieving value from the acquisition, particularly considering the decidedly poor results of previous foreign bank acquisitions in the country.

Ramky Subramanian, TMB’s chief of retail and SME banking, shrugged off the results.

“The goal is to be a top-tier retail bank. Is this going to happen overnight? No. It will take effort on multiple levels,” he said.

“ING certainly views [TMB] as an important initiative. There is absolutely a strong sense of commitment.”

A veteran of Citibank, Bank of America and India’s HDFC Bank, Mr Subramanian will play a central role in expanding TMB’s retail share and helping cross-sell ING’s investment and insurance products.

“We’re actually quite fortunate to get this size scale. Foreign banks entering into a new market often start much smaller,” Mr Subramanian said.

“TMB has a large branch network, an established customer base. The starting point is one of strength.”

Thailand’s sixth largest bank in terms of assets, TMB has a 9% market share in terms of branches and 7% in terms of cards. Of TMB’s 9,000 staff, two-thirds work on the retail banking side.
(Bangkok Post)

Retail banking ? And proud of it ? A “top tier retail bank” ? Ah ah ah ah ! In Thailand ? In the current market conditions ? With the Thai Military Bank ?ย  With a financial crisis of Everest proportions cooking worldwide ? Now this is really entertaining. ๐Ÿ˜‰

More than ever : let’s wish good luck to ING…

7 Responses to “TMB Bank : bad timing for the dutch ING”


  1. 1 Fonzi 14 July 2008 at 6:56 am

    I think we all-BP, you and I– blogged about this. I think Shawn Crispin wrote piece in Asian Times about it.

    Gotta wonder who at ING was doing due diligence for this transaction.

  2. 2 ThaiCrisis 14 July 2008 at 7:26 am

    They made one fundamental mistake: they thought they could do better… than the Singaporeans.

    The bank DBS (SIngapore) tried before. They bought a stake and then tried to change TMB…

    In september 2007 DBS rejected an offer to increase its stake, “saying it was not assured sufficient management control.
    http://www.iht.com/articles/2007/11/08/bloomberg/sxtmb.php

    You bet !
    ๐Ÿ˜‰

    I mean how ING could seriously believe that Somchai in his tight uniform of General, and all his medals and all his fellows would let them “manage”… TMB ?

    We are talking here about Thai Military Bank !

    Of course, someday, Somchai will be history… At one point, even in Thailand the reality principle will prevail… but it will take very long time.

    Until then… TMB will remain… TMB.

  3. 3 ThaiCrisis 14 July 2008 at 7:29 am

    I forgot my motto : “good luck”.
    ๐Ÿ˜‰

  4. 4 fall 14 July 2008 at 3:06 pm

    IF TMB remain…

    …smell another FIDF, miles away.

  5. 5 hobby 15 July 2008 at 9:54 pm

    The 20 to 25% loss in value since October needs to be put into perspective – what was the average loss in value for other banks share prices over the same time period?

  6. 6 MSB 16 July 2008 at 7:54 am

    I am sure ING don’t mark to market this investment. It was a long term strategic acquisition and anyway a paper loss of $100m for a $25bn bank is insignificant. Makes the change of a rights issuer higher given that they would lower their average cost.

  7. 7 ThaiCrisis 16 July 2008 at 8:35 am

    It’s funny, you sound exactly like BOA, Citigoup, UBS, Northern Rock, Lehman Brothers, Fannie, Societe Generale, Credit Agricole… No problem… No impact… long term investment… bottomed out… the crisis is over… no need to recapitalize… blablabla.

    And more importantly, you assume that all markets are equal, that everybody play according to the rules… A bank in Thailand is bloody same than a bank in the US or in the UK… isn’t it ? It’s the same word ! How could it be different ? ! ๐Ÿ˜‰

    The loss might be -right now- not really significant… but what I’m talking about are the long term perspectives. And precisely the management issues.

    To buy a stake of something is relatively easy in Thailand, especially when the other party needs money. But then after to run the business, this is where the real game begin…


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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