Lehman Brothers is selling its Thai businesses to the units' senior executives in a management buy-out. Bankers and brokers in Bangkok say that Kittivalai Charoensombat-amorn, Lehman's country head in Thailand, is leading the group of investors.

A spokesman for Lehman refused to comment on rumours that the bank is in the process of selling both of its Thai businesses, Global Finance and Global Thai Securities, and that applications to the relevant authorities - the central bank and the securities regulator - have already been made. The decision would leave Lehman with no presence in south-east Asia outside Singapore.

If Lehman does withdraw it will not be a great surprise. Earlier this year Merrill Lynch announced its intention to accept a bid from its own senior managers for the bank's Thai operation, Merrill Lynch Phatra Securities. Merrill expects to complete the sale of Phatra by November.

BNP is also said to be scaling back its presence in Thailand.

It is possible that Lehman will follow Merrill's example in its Thai retreat. Merrill's chairman in Thailand, Banyong Pongpanich, says that the two outfits will still work together, but the buy-out will allow Phatra and Merrill to concentrate on their strengths. For Merrill, that means a return to a narrower focus on top-tier business - a strategy that has led the bank to withdraw from Malaysia, the Philippines and Indonesia.

However, for Phatra the deal will mean a chance to expand into areas that Merrill is not interested in. "We will cover more local stocks, service local investors, expand our high net-worth business and work on more domestic investment banking transactions," says Pongpanich.

At the same time, Merrill clients who continue to take an interest in Thailand will still have access to Phatra, and Phatra clients will still be able to draw on Merrill's expertise.

The foreign exodus comes amid Thailand's strongest stock market rally since the crisis, with the index almost doubling in the past 12 months. But brokers in Thailand say the departures do not reflect concerns about overheating.

"Every major investment bank is revising its strategy, streamlining, slimming down its business," says one. "This isn't just about Thailand, it's about global strategy."