SCB shares bounce after announcing Bitkub acquisition

Siam Commercial Bank (SCB), one of Thailand’s largest lenders, saw its shares jump by 3.46 per cent at the opening on Wednesday after it announced a 17.85-billion-baht acquisition of shares in a prominent digital asset exchange company Bitkub.

SCB’s price rose since Tuesday afternoon, ahead of the official announcement, as did Bitkub Coin (KUB). It traded at 134.50 baht in the morning session.

The bank notified the Stock Exchange of Thailand (SET) late Tuesday that its holding unit SCB Securities (SCBS) has entered into an agreement to invest in Bitkub Online Co., Ltd. 

The deal, which will be subject to due diligence and compliance with Bank of Thailand and Securities and Exchange Commission rules, is planned to be completed by the first quarter of 2022.

SCB chief executive Arthid Nanthawithaya said “the investment will allow SCBS to be a major stakeholder in developing the digital asset ecosystem in Thailand.”

A bold step

SCB’s investment will propel Bitkub to be Thailand’s third unicorn, a privately owned startup valued at over USD 1 billion, after Flash Express and Ascend Money.

“Bitkub and SCBX share the same vision that digital assets are critical to the long-term development of the Thai economy,” said Bitkub founder Jirayut Srupsrisopa.

Krungsri analyst Ratasak Piriyanont said in a research note that “the Bitkub acquisition is a bold and exciting move.” 

“We project strong growth potential at Bitkub and synergies with SCB’s securities and asset management businesses.” 

Earnings contribution from Bitkub to SCB would be modest around 5 per cent but there is a room for growth in years ahead, he noted. 

Bitkub reported a digital asset trading value of roughly 1 trillion baht in the first three quarters of 2021, marking a market share of 92 percent and yielding a net profit of 1.5 million baht.

Earlier in September, SCB had set up a digital-asset venture capital with Charoen Pokphand Group, each contributing USD 100 million, with the goal of raising USD 600-800 million from outside investors. 

A source told Thai Enquirer that the SCB’s deal with CP Group and Bitkub acquisition are separate schemes and have nothing to do with each other.

Aside from CP Group, SCB also teamed up with the country’s biggest mobile carrier Advanced Info Service (ADVANC) to form a digital lending joint venture in accordance with the bank’s restructuring. (Read more here)

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