SCB eyes investment banking

Sarat Ratanaporn, first executive vice president of SCB for commercial banking, noted that demand for IB has risen among companies in the agricultural and alternative-energy sectors, particularly.

Those in the agricultural sector such as rubber and sugar businesses are expanding to cash in on high product prices, and need funds for this purpose. Meanwhile, those in alternative energy and manufacturing are securing new funds for expansion. With IB services included in the commercial banking operations, SCB is in a position to offer total solution services to clients. Services to clients can be extended from fund raising options and mergers and acquisitions to cover trade finance, foreign exchange services and others that the bank has to offer.

"Our goal is to expand fee-based income, not loans," Sarat said.

Sarat said there are 3,000 customers in SCB's commercial banking portfolio. Target clients of the banks are companies with annual turnover of Bt500 million to Bt1 billion. Fee income deriving from customers in this segment accounts for 30 per cent of the total, and this is expected to rise to 40-50 per cent in the near future.

"Clients prefer coming to one place for a single package of solutions, as they can save time and cost," he said, admitting this inclusion of investment banking services into the bank's operations could put brokerage houses at a disadvantage.

Sompob Peerasunthornpong, chief executive officer of Finansia Syrus Securities, agreed. He said that securities companies, which in the past were exclusive providers of IB services, are facing a tough time as banks can also extend loans.

"The securities houses are not only competing against their peers, but also against commercial banks," he said.