KUALA LUMPUR (Nov 25): RHB Bank Bhd (KL:RHBBANK) will be divesting its entire 99.95% stake in RHB Securities (Thailand) Public Company Ltd to Singapore-based stock brokerage firm Phillip Brokerage Pte Ltd for THB1,253.77 million (RM161.81 million), marking its exit from Thailand's stockbroking and securities market.

The stake is currently held via its wholly-owned RHB Investment Bank Bhd. The divestment is expected to be completed by the fourth quarter of 2024, subject to the approval of Thailand's Securities and Exchange Commission, according to its bourse filing on Monday. The proposed disposal is not subject to the approval of the shareholders of RHB Bank or any relevant regulatory authority in Malaysia.

“The decision to divest RHB Securities Thailand follows a comprehensive review of our business and the operating environment in Thailand,” said RHB Banking Group managing director and group executive officer Datuk Mohd Rashid Mohamad.

“This is part of our ongoing strategy to focus on markets where we can achieve greater impact. During this transition, we are fully committed to ensuring a seamless experience for our clients and maintaining the highest levels of service,” Rashid added.

RHB had also in 2020 sold its Singapore stock broking business, RHB Securities Singapore Pte Ltd, to Phillip Securities Pte Ltd. At the time, it said it had no intention to pull out from the stock broking business in other markets. A year before that, RHB Investment Bank shuttered its operations in Hong Kong due to an increasingly challenging brokering environment.

RHB Securities Thailand, which has a regional office and five branches — three of which are located in Bangkok —  has been loss-making for the past four financial years between 2020 and 2023. For FY2023, RHB Securities recorded an audited loss after tax of THB106.52 million (RM13.75 million), while its audited net assets stood at THB1,515.34 million (RM195.57 million). 

The banking group blamed the loss on the challenging competitive landscape in Thailand's stock broking and securities industry, coupled with RHB Securities Thailand's lack of scale to compete competitively.

Proceeds from the stake sale will be utilised to support the working capital needs of RHB Investment Bank, it said.

“Looking ahead, we are excited to refocus our efforts that align with our strategic priorities. In this context, RHB Bank Thailand remains a pivotal driver of growth and an essential component of our regional retail banking footprint,” Rashid said. 

“We remain steadfast in our commitment to delivering innovative solutions and superior services and create long-term value for our clients, employees, and shareholders,” Rashid added.

In Thailand, RHB Bank currently offers retail banking, treasury, corporate banking, capital markets, stockbroking and derivatives, its 2023 annual report showed. The Thailand market contributed a total income of THB651.8 million from its 10 branches there in 2023.

RHB Bank's share price settled 11 sen or 1.7% higher at RM6.61 on Monday, bringing the group a market capitalisation of RM4.36 billion. Year-to-date, the stock has gained 21%.