Kasikornbank (KBank)’s share repurchase program has attracted market attention following reports that the bank requested its major shareholder, Gulf Development (Gulf) Plc, to refrain from selling its KBank shares during the buyback period.
Analysts believe this move aims to ensure compliance with the Bank of Thailand’s regulations regarding ownership limits in financial institutions.
Sources indicate that KBank was concerned that if Gulf—holding over 5% of the bank’s shares—were to sell shares directly to KBank, it could violate central bank rules. Under these rules, shareholders with more than a 5% stake must obtain approval before selling, and such shares cannot be sold directly to the bank; instead, they must be sold to other investors.
Gulf, however, declined to comply, citing its fiduciary duty to act in the best interests of its shareholders. The company clarified in a filing to the Stock Exchange of Thailand (SET) that the bank’s buyback program does not restrict Gulf’s right to trade its shares.
“As a listed company, Gulf is obligated to manage its investment portfolio flexibly and in a way that maximizes shareholder value. Its investment in KBank is considered highly liquid with favorable valuation metrics, including low price-to-book (P/BV) and price-to-earnings (P/E) ratios, along with an attractive dividend yield,” Gulf stated.
Recently, Gulf’s stake in KBank increased to over 5%, up from 4.53% as of March 13, 2025.
Therdsak Thaveeteeratham, Executive Vice President of Asia Plus Securities (ASPS), explained that KBank’s cautious stance was likely a preventive measure to avoid regulatory issues.
“Since Gulf’s investment is purely financial and it has not appointed representatives to KBank’s board, this request is intended to prevent violations of the Bank of Thailand’s rules. It may also set a precedent prompting other financial institutions to remind their major shareholders to exercise caution during buyback periods,” he said.
Therdsak further noted that Gulf has the legal right to sell its shares but would need to do so to another investor if it wishes to participate indirectly in the buyback.
An anonymous analyst suggested that KBank might be concerned that Gulf could sell a large portion of its holdings during the buyback, which could depress the share price and complicate the repurchase process.
“If Gulf doesn’t sell, it simplifies KBank’s buyback efforts and could enhance benefits to earnings per share (EPS) and return on equity (ROE). Conversely, if Gulf sells, it might exert downward pressure on the stock and increase the bank’s repurchase costs,” the analyst remarked.
Market commentators also interpret Gulf’s stance as a sign of its desire to continue benefiting from its investment in KBank—through dividends and strategic cooperation, especially if its stake rises to 10-20% in the future.
“The refusal to comply with KBank’s request reflects Gulf’s intent to retain flexibility in managing its portfolio for maximum return. It also highlights differing interests between the major shareholder and the issuing company, both acting within their rights to optimize value,” said another analyst.
According to Maybank Securities, with a buyback budget of up to 8.8 billion baht, KBank is expected to maintain its dividend payout at 10.5–12 baht per share for 2025, resulting in a dividend yield of approximately 5.8–6.6%. They noted that the repurchase program demonstrates effective capital management and provides an alternative way to deliver shareholder value beyond regular dividends.