KBank banks on Asean alliances ahead of AEC
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Strategy set to facilitate two-way investments
With the Asean Economic Community coming in three years, Kasikornbank has changed its strategy to form more alliances with banks in the region and focus more on the provinces instead of Bangkok to cash in on booming border trade.
Somkiat Sirichatchai, senior executive vice president, said yesterday that nobody could predict the AEC’s impact on his or her business, but everyone should prepare to serve the single market.
Under the challenge of the AEC, KBank has set a strategy called “Asean Alliance” by joining with bank allies in Asia and Asean to serve Thai investors that plan to expand overseas and foreign investors that plan to penetrate Thailand.
KBank and regional banks in Japan and South Korea have developed financial services for Thai, Japanese and Korean customers operating here and in those countries.
Last year, KBank succeeded in increasing its share of the local Japanese lending market to 13 per cent from 12 per cent.
KBank has 19 Japanese and two South Korean regional bank partners.
KBank will link up with banks in countries in Asean where Thai businesses are becoming more active, such as Vietnam, Indonesia and Burma. KBank and its bank allies will co-develop services and design financial products to match up with their customers’ requirements, Somkiat said.
It will also establish representative offices in Asean countries to support the trade and investment of Thai companies and regional bank customers.
KBank has seven bank partners in four Asean countries – Vietnam, Indonesia, Singapore and Laos.
In China, KBank has established a branch in Shenzhen with the cooperation of Minsheng Bank, a local bank, to provide yuan loans to Chinese small and medium-sized enterprises. The Chinese government is satisfied with KBank’s services and has allowed it to add more branches in that country, he said.
The bank will open two branches in China this year to boost its loans there to Bt10 billion from Bt4 billion last year.
The bank projects its Chinese SME loans surging to Bt100 billion within five years.
The alliances will help strengthen KBank’s product offerings and enable it to cover the full needs of customers, Somkiat said.
Krisada Lamsam, another senior executive vice president, said the AEC had also changed KBank’s mindset towards its home base.
“We used to give more weight to Bangkok because it is the centre of business, but the arrival of the AEC prompts all businesses to look at border trade,” he said. “The mindset on doing business must give more importance to the rest of the country, not only Bangkok, because the provinces represent the whole of the country and the route to cross borders rather than Bangkok.”
The driver of the bank’s loan growth target of 9-11 per cent this year is the provincial market, not the capital, he said.
The loan portfolio sources 48 per cent from Bangkok and 52 per cent from elsewhere in the country.
The bank will target business customers in large cities in three industries – tourism, manufacturing and agriculture, Krisada said. It will also pursue individuals working in the three industries to persuade them to use KBank as their main bank.
