Equity Analysis /
Thailand

Siam Commercial Bank PCL/The: Key takeaways from SCB’s special meeting—SCB Reimagined

  • A new corporate structure

  • Goals for the next 5 years?

  • Our thoughts about the goals

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

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Bualuang Securities
23 September 2021

The key takeaways from the SCB Reimagined special meeting are: 1) SCBx will be established as the group holding company, 2) new subsidiaries will engage in finance and fintech businesses in order to propagate long-term earnings growth, 3) this pioneering move may transform the Bank sector, and 4) our Finance coverage could be negatively impacted by SCB moving into its space. BUY!

A new corporate structure

SCB plans to establish SCBx as the group holding company. There will be a share swap between SCB Bank and SCBx (a 1:1 swap ratio) and SCB will pay a Bt70bn dividend to SCBx for business/company transfer funding (~70% of SCB’s total dividend), future dividends for SCBx shareholders, and future SCBx investments. SCBx will be responsible for group capital allocation and investment.

SCBx‘s new ventures will fall into two broad categories: 1) quality earnings & near-term earnings accretive, such as Card X, AISCB JV, etc, and 2) platform-based businesses & future capabilities, such as SCBS, SCB10X, Robinhood, etc (details on page 2-8). Note that SCB will transfer its credit card business to Card X.