Ekachart Finance, a Thai finance company with THB24 billion (USD553.4 million) in assets, hopes to become a market maker in the Thai derivatives market once it receives a restricted bank license from the Bank of Thailand. The finance company plans to merge with four other financial institutions, after which it hopes to receive the license and engage in many of the same activities as commercial banks, including derivatives, said Pattana Setthachayanon, v.p., treasurer in Bangkok. The new entity will likely be called National Bank.
Ekachart hopes to boost its THB10 billion loan assets book by marketing itself as a one-stop shop, offering both lending services and derivatives, Setthachayanon said. Ekachart has never used derivatives before, but believes it will be able to tap demand from borrowers looking to lock in currently low interest-rates.
Bank of Thailand introduced restricted licenses around two years ago in a bid to strengthen the banking sector, Setthachayanon said. To get the license, financial institutions have to be a certain size, so are encouraged to merge, he continued.
