KBank climbs the value chain
Kasikornbank believes that value-chain solutions are becoming a crucial platform for the banking sector in dealing with the requirements of larger corporate customers.
Senior executive vice president Krisda Lamsam said yesterday that KBank was giving new emphasis to value-chain solutions because it believed this approach would help it to become the main operational bank for larger corporate customers.
"Larger corporate customers have used many banks for their financial transactions because these corporations have various value chains. But if a bank has value-chain solutions to serve all these requirements, larger corporate customers - through their customers - will use only one bank as their main bank," he said.
The value-chain solutions platform has become a key strategy for KBank's sustainable growth, Krisda said, adding that in today's banking business, banks could not look to promotions or campaigns alone to get loan growth or fee income.
Value-chain solutions cover finance advisory, loans, cash management, and whatever financial transactions customers require, so that these solutions are becoming a crucial instrument for KBank in providing financial solutions both upstream and downstream.
Krisda said the priority in pursuing value-chain solutions was how to approach dealers or suppliers of major sponsors to use the bank's financial services. When sponsors and their partners become frequent users of the bank's financial services, this ensures that KBank will become their main operational bank.
After that, income and new customers are the next step in value-chain solutions.
KBank began value-chain solutions with PTT and its partners in April.
Yesterday, the bank was awarded the task of taking care of financial services for four customers of Thai Airways International: passengers, agents, Thai cargo and suppliers of Thai catering.
KBank is dealing with Siam Cement Group and a major auto supplier, Summit Group, to provide comprehensive value-chain solutions.
Value-chain business currently exists in six major industries in Thailand with a combined sales of Bt13 trillion. KBank claims a 17-per-cent share of this value-chain market.
The six industries are petroleum and petrochemicals, retail and wholesale, construction materials and equipment, transport, food and beverage and auto and auto parts.
Krisda said that while KBank held a 17-per-cent market share, the remaining 83 per cent did not belong to other banks because there were no other players entering the value chain market.
KBank is aiming to pursue value-chain business with larger industries to reach a 30-per-cent share of the market within three years.
