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Thailand approves tax incentive plan to encourage bank mergers
[BANGKOK] Thailand's Cabinet approved a plan on Tuesday to offer tax incentives to encourage mergers among the country's commercial banks, a move that will help them better compete with their larger regional rivals.
The incentives include tax breaks for shareholders with stakes in commercial banks.
"When you compare it to large banks in the region, such as in Malaysia and Singapore, where the assets are not less than 4 trillion baht (S$167.7 billion), which is the entry level of banks in the region, Thailand's largest commercial banks have total assets of not less than 2 trillion baht," Nattaporn Jarusripitak, spokesman for the deputy prime minister for economics, told reporters.
"So the finance ministry thinks there should be measures to encourage the merger of Thai banks in order to be competitive in Asean," he said, referring to the Association of Southeast Asian Nationscountries.
"Tax exemptions will be granted to shareholders of commercial banks that have merged ... including corporate income tax and personal tax." Thailand's five biggest lenders are Bangkok Bank, Krung Thai Bank, Siam Commercial Bank, Kasikornbank and Bank of Ayudhya.