UPDATE 1-Scotiabank approaches BOC unit, other lenders for Thai bank stake sale-sources

Tue Feb 23, 2016 2:05am EST
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* Biggest Thai bank deal since MUFG bought Bank Ayudhya 2013

* Japanese, Malaysian, Taiwanese banks approached-sources

* Scotiabank's strategy to exit Asia retail business-source (Adds detail on Scotiabank, quote from source)

By Saeed Azhar and Denny Thomas

SINGAPORE/HONG KONG, Feb 23 (Reuters) - Canada's Bank of Nova Scotia has approached a unit of Bank of China , Maybank and two Japanese banks to gauge their interest in its $1.7 billion stake in Thai lender Thanachart, people familiar with the matter said.

Bank of Nova Scotia, known as Scotiabank, has hired Morgan Stanley to advise it on the sale of the 49 percent stake, the sources said. First-round bids for the sale are expected in the second quarter, one of the people added.

Scotiabank is the latest mid-sized Western bank in Asia to rethink its strategy in the face of headwinds from low growth in China, depressed commodity prices and falling interest rates.

The Canadian lender had flagged it was reviewing its Thanachart stake in December. One of the sources said it wants to exit its retail presence in Asia and focus mainly on corporate banking in the region through a few key offices.

Thanachart Capital Pcl owns the remaining 51 percent stake in Thanachart.   Continued...