By Sucheera Pinijparakarn
The third largest bank by assets believes in making careful preparations to grow with its customers, Manop Sangiambut, executive vice president and head of international banking, said last week.
The bank can provide credit to and facilitate transactions for its Thai customers active abroad and foreign customers in Thailand through its existing branches in Laos, Cambodia, Vietnam, Hong Kong and Singapore.
The representative office in Myanmar that opened last year cannot serve as a full branch until the central bank there grants SCB a commercial banking licence.
Thailand is a hub in Asean because it is linked geographically to many countries including the GMS. SCB should also broaden its network to tap markets in Asean and beyond such as China and Japan.
“The gross domestic product of the GMS is 60 per cent of the Thai economy but we expect that to increase to 70 per cent in five years,” he said.
Thailand has made significant investments in the GMS. The bank projects outgoing direct investment will surpass trade in the near future.
Investment and trade in the region have benefited from China, which is close to the borders of the GMS countries.
SCB has mapped out three zones for building a strong network, starting with the GMS and followed by China and Japan. For Japan, SCB is looking for local bank partners. For China, it is planning to set up a branch in Beijing.
“We will focus on Asia, not only Asean, because Chinese and Japanese business flows into Asean and Thailand, so the bank has to forge a relationship with local banks,” he said.
The bank has no plan to set up more branches in the lower Asean countries since the Singapore branch can service Thai companies investing in Malaysia and Indonesia.
Customers are actively studying the GMS and Myanmar markets before deciding to invest alone or look for partners.
“We expect private customers will take one to two years to study and weigh the risks in each country in the GMS,” he said.
The market and customer behaviour in some countries of Asean have been changing, so the bank is planning to adjust the structure of its existing branches including in Vietnam.
“Vietnam is a big market and progressive compared with Laos, Cambodia and Myanmar. Vietnam |is a base for manufacturing especially for heavy industry and the service industry. The non-performing loans in the banking industry over there also need to be followed,” he added.