Under the terms of the deal Scotiabank paid $0.54 for each share, with 160,000 acquired from the Thai bank's parent company Thanachart Capital, while the remaining 280,000 are to be new shares issued by Thanachart.
Rick Waugh, chief executive and president of Scotiabank, said: "Scotiabank is optimistic about Thailand's growth potential and we look forward to growing our operations in the Asia-Pacific region."
Scotiabank also announced that it plans to up its stake in Thanachart to 49.9 per cent by the end of 2007, pending approval from the relevant Thai authorities which are expected to begin a process of liberalisation of the domestic banking market soon.
Thanachart has 168 branches throughout Thailand and is the largest operator in the country's car loans sector.
Last year the Thai bank recorded a 37.8 per cent fall in profits, with taxes and increased operating costs blamed for the company's impaired performance.