The long-awaited consolidation of Thailand's over-crowded banking sector moved a step forward in early March, when Thal Military Bank (TMB), which ranks as the seventh-largest player by assets, signed a merger agreement with DBS Thai Danu Bank and the Industrial Finance Corporation of Thailand (IFCT). The Bt15 billion all-share merger, slated for completion in June, will create Thailand's fifth largest bank in terms of asset size. It also represents a milestone in the government's attempts to streamline a financial sys-tem characterized by too many players, with too many types of licenses and too little economy of scale. "If you count all the listed and non-listed finance companies, credit fonciers and banks in Thailand, you come to a figure of around 100 institutions, which is far in excess of what the market requires," says Ratchanok Dandamrongrak, analyst at National Securities. "Within the next two years, I expect the number of banks to fall to around seven players and I expect most of the finance companies to disappear altogether."
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