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By Tara Perkins

A Thai bank that’s partly owned by Bank of Nova Scotia (NYSE:BNS) is considered the leading potential buyer for a stake in another local lender that’s up for sale, reports out of Bangkok say.

Dow Jones is reporting that Thanachart Bank PCL is the top contender for a 47.6% stake in Siam City Bank PCL, which is being put on the auction block by the Bank of Thailand’s rescue arm, the Financial Institutions Development Fund.

The development fund’s board has approved a number of bidders who will now conduct due diligence on Siam City, which is the country’s seventh-largest bank, according to the report.

Final bids are due at the end of January, and the sale is expected to be completed in the first quarter of 2010.

Scotiabank now owns just under 49% of Thanachart, the maximum amount that it’s allowed to hold as a foreign institution. Scotiabank initially bought a 25% stake in Thanachart in 2007 for about $240 million, and boosted its ownership to the maximum limit earlier this year.

The head of Scotiabank’s Asia Pacific operations told the Globe and Mail last year that the bank was looking to build out its consumer banking operation in the region, and was hunting for acquisitions in China, Thailand, Malaysia, Taiwan, India, Vietnam and possibly the Philippines.

Source: Scotiabank: Expanding Operations in Thailand?