HSBC, Standchart among BankThai suitors: sources

Passengers on a bus pass a branch of HSBC in London May 12, 2008.

BANGKOK (Reuters) - Britain's HSBC Holdings Plc (HSBA.L) and Standard Chartered Bank (STAN.L) are among five banks interested in buying a 42 percent stake in Thailand's BankThai BT.BK, financial sources said on Friday.

The sale of the stake held by a unit of the Bank of Thailand was expected to fetch 3.5-4.4 billion baht ($106-133 million), said the sources who are familiar with the situation.

"There are at least five banks showing an interest to buy the BankThai stake. Four of them are foreign banks, including HSBC and StanChart's Thai unit," one of the sources told Reuters.

HSBC's Bangkok branch declined to comment.

A spokesman for StanChart's Thai unit said: "Like a number of banks, we have been looking at the opportunity. However, we cannot comment any further at this time."

The sources said the other potential buyers were Thailand's Tisco Bank TISC.BK and TPG Newbridge TPG.UL, a U.S. private equity firm that is part of a consortium which already holds 42 percent of BankThai.

Tisco said in late April it was seeking partners to help expand its customer base and boost competitiveness and had looked into buying a stake in BankThai since last year before BankThai sold a stake to TPG Newbridge.

The sources did not name the fifth potential suitor for the stake held by the Financial Institutions Development Fund (FIDF), the central bank's rescue arm set up after several finance firms collapsed in the 1997-98 Asian financial crisis.

The FIDF said in February it wanted to reduce its stake in BankThai and had been approached by several foreign investors, but it did not name them.

Phatra Securities PHAT.BK was an advisor of the stake sale, the sources said, adding the central bank was likely to announce a deal in the middle of July.

BankThai, Thailand's ninth-largest bank by assets, has a market value of $261 million on the Thai bourse. It has about 218 billion baht in assets, 86.6 billion baht in loans and operates 146 branches.

"Whoever is the winning bidder needs to help BankThai to raise more capital to expand its business," one of the sources said.

BankThai has said it planned to raised more funds after it raised 6.08 billion baht in a rights issue in January.

The bank, which was exposed to about $50 million of subprime collateralized debt obligations (CDOs), reported a net loss of 2.09 billion baht in the first quarter when it set aside a provision of 2.42 billion baht for CDOs.

Last year, it posted a net loss of 6.93 billion baht, due to large loan-loss provisions.

Shares in BankThai closed unchanged at 1.28 baht on Friday, when the main Thai index was 0.93 percent higher. Tisco shares TISC.BK rose 5.5 percent to 22.90 baht.

($1=33.08 Baht)

(Editing by Darren Schuettler and Sue Thomas)