TMB&TBANK unveil merger plans, synergizing complementary strengths and upgrading financial services to serve 10 million customers; Complete transaction expected to close by 2021

Mr. ChumpolRimsakorn, Deputy Permanent Secretary of Ministry of Finance, said, "This merger is in line with the government's policy to promote consolidation in the financial sector to enhance the scale and improve market position in which will contribute to the country's financial stability and the economy as a whole. Moreover, this will also help encourage foreign direct investment to promote Thai economy in overall. The Ministry of Finance is ready to put the additional investment of at least 11,000 million baht and could alsopurchase more shares than its pro-rata allocation if other existing shareholders do not fully exercise their rights to subscribe newly issued shares.to remain a key shareholder position. The ministry is confident in TMB's pastperformance and ING potential in fostering TMB towards Thailand's leading bank. We are assertive in the core strengths of TCAP, a holding firm of TBANK, that we will unite forces to bring Combined Bank's augmented stability by strengthening and enhancing competitive advantage."

Mr. Mark Newman, Managing Director, ING Challengers and Growth Markets, Asia, added, "With the favorable results derived from the investment in TMB, the ongoing digital developments in the banking sector and beyond, ING supports the merger and intends to invest approximately12,500 million baht.ING and TCAP have developed a mutual trust through this process and share the collective goal to achieve substantial growth for the merged bank as a digital leader. And with the ongoing support from the Ministry of Finance, the merger of the two banks will be successful in achieving the desired results."

Mr. SuphadejPoonpipat, Chairman of the Executive Committee of TCAP, added, "TCAP sees the potential and strengths of both banks that once combined, the operational scale will be double in size with approximately 2trillion baht of the asset in addition to business structure and expertise that complement each other. The new combined bank of TBANK and TMB will expand the customer base to 10 million with an overlap smaller than 10%, a considerable edge to gain market position and greater business opportunities yielding from the integrated expertise. The merger will enhance competitiveness encompassing all customer bases nationwide, resulting in higher business returns that will benefit shareholders, customer, and Thai economy in overall. After receiving share payments and acquiring the stake of TBANK's subsidiary companies and TBANK's shares in other companies, TCAP is set to buy TMB's shares amounts 44,000 million Baht. TCAP is expected to have the remaining cash of 10,000 million baht after series of activities, mentioned above. The management team willmanage the fund to generate the maximum returns accordingly."

Mr. Philippe G.J.E.O. Damas, Chairman of the Executive Board of Director of TMB, added, "I'm delighted that TCAP and TMB will join the new bank's board of directors. The TMB board of directors is eager to support the direction and operation of the new management team to ensure the new bank thrives."

Mr. Somjate Moosirilert, CEO of TCAP, said that TBANK is required to restructure. TCAP will then adopt shares of TBANK's subsidiariesincluding Thanachart Insurance Public Company Limited, Thanachart Securities Public Company Limited, TS Asset Management Company Limited, Patum Rice Mill & Granary Public Company Limited, and MBK Public Company Limited.

Meanwhile, for other investments, TCAP has established Special Purpose Vehicle: SPV1 and SPV2 to purchase the proportion of stock held by TBANK back to TCAP which are Ratchthani Leasing Public Company Limited and other investment companies.

After restructuring, TBANK will remain a major shareholder in Thanachart Fund Management Company Limited (TFUND) and Thanachart Broker Company Limited (TBROKER) with 75% and 100% of their total shares respectively.

TBANK will sell 75% of TFUND's total shares to third party. The sale process expected to be completed prior to or along with the Completion in Merger.

After successfully completing TBANK's restructuring, TMB will purchase all TBANK common stocks from all shareholders on cash payment method. TCAP and BNS will purchase newly issued shares of TMB as well as purchase a portion of TMB's stock offering to TBANK'sminor shareholders. As a result, it will enable TCAP to sell common stock to TBANK's minor shareholders subsequently.

TCAP is ready to support the work of the new management team to ensure a smooth merging transition.

Mr. Piti Tantakasem, CEO of TMB Bank, summed the details on the TMB transaction, "After fulfilling the conditions precedent to the share purchase agreement between TMB, TCAP, and BNS, completing TCAP and TBANK restructuring, and merger plans receiving approval from the Bank of Thailand, it will enter the consolidation process following these major steps:

In September, TMB will hold an extraordinary general meeting to seek approval relating to the merger plans andcapital increase by proposing the purchase of TBANK's common stock from all TBANK shareholders.

TMB will raise capital of 130,000 million baht by announcing series of fund-raising activities. In the first part of equity fund raising, TMB will issue new common stock proposed to the Bank's existing shareholders in accordance with the transferable subscription rights (TSR). The Bank expects to raise capital in the amount of not more than 42,500 million baht. For the second part, the Bank will provide issuance and offering of common stock to new investors and all TBANK's existing shareholders. The Bank expects to raise capital from these two investor groups in the amount of 6,400 million baht and of 57,600 million baht respectively.

Alongside with Equity Fund Raising, TMB will also finance through debt financing by issuing of debt financial instrument qualified as Tier 1 to foreign institutional investors in the amount of approximately 9,600 - 16,000 million baht and offering of subordinated debt qualified as Tier 2 to institutional investors and high net worth investors in the amount of 15,000 million baht.

Also, TMB has additional funds from the Bank's debt financing in the amount ofnot more than 20,000 million baht if there is a shortfall.

The new shareholding structure will be as follows: ING 21.3%, TCAP 20.4%, Ministry of Finance 18.4%, Scotiabank (BNS) 5.6%, and minority shareholders 34.3%

The share purchase transaction is expected to be completed by December 2019. From January 2020 onwards, the two banks will be managed under the same board of directors and management team. Each business segment will be gradually integrated, and it is expected tobe completed by 2021. During this merger process, customers of both banks can still enjoy the services of each bank as usual. Updates on the progress will be informed to customers continuously.

The new bank's strategy will leverage and combine the core strengths of both banks to deliver superior experiences for customers. The new bank will remain the top choice with a range of deposit and investment products on top of outstanding loan products. Furthermore, the integration will furnish the new bank with enhanced capability to develop better products and services in the digital age."

Mr. Praphan Anupongongarch, CEO and President of TBANK, disclosed, "As part of the new bank management team, we would like to ensure you that the merger will benefit all stakeholders, especially customers, partners, employees, and shareholders. The consolidation will lead to the upgrading of services and a more comprehensive range of products for all customers. Customers will receive benefits and best-in-classservices from the new bank. The business integration will deliver the combined expertise and core strengths of respective banks that complement each other. TBANK is a leader in auto loan while TMB owns strength in deposit franchise, the merged specialties will result in effective cost management in business operations and greater opportunities to generate increased revenues from a larger customer base of 10 million which will drive the Bank's competitive edge and certainly build sustainable growth for customers, partners, employees, shareholders, and all stakeholders.

Regarding employee policy, the merger will offer employees of both banks more challenging opportunities given the larger customer base and a more comprehensive range of product and service offerings. All parties will ensure that the employees of both banks are treated fairly and thoroughly. There will be a solid continuous plan for learning and development program to further enhance our people capability to maximize their potential. The welfare will be provided appropriately and will not be lessened."

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