CIMB Thai to focus more on non-bank partners

CIMB Thai president and chief executive officer Subhak Siwaraksa said it was continuing to look into broadening its network of branches, but not always through acquisitions. The parent group has suggested CIMB Thai had no need to rely solely on the banking channel, and he said collaboration with non-banking business with wider-reaching channels might help strengthen the company.
“We have to think about what kind of networks would help our products access customers nationwide.” We told the group as well that the path of banking doing should be adjusted.
Subhak said CIMB Thai had joined with Thailand Post to offer the Bank@Post service, through which customers can make deposits into their accounts via post-office counters. This service is an example of how the firm can link with non-banking enterprises.
“We will propose to the group the business platform of joining with non-banking partners, which we expect to implement in the second half of this year,” he said.
This endeavour is part of the bank’s strategy to broaden its distribution channels and stimulate business. Moreover, it will focus more on lending to corporates and small and medium-sized enterprises through cross-selling after implementing its new core banking system, 1Platform, in June.
CIMB Thai will be the first member of the CIMB Group to implement this system. It is aimed at providing higher potential to introduce a broad range of innovative products and higher competitiveness in cross-border financial solutions to help CIMB Group achieve its goal to be a leading Asean franchise by 2015.
The bank will aim to serve more medium-sized companies that are growing and are expected to require funds and financial assistance. CIMB Thai’s expertise in investment banking could help such companies raise funds both domestically and regionally, as it does with larger corporate customers.
Moreover, the bank plans to capture supply-chain customers, to strengthen its corporate and SME loan portfolio.
Retail, SMEs and supply chains are important for net interest margin, which the bank targets this year at 3.5-3.8 per cent, compared with 3.46 per cent in 2011. By concentrating on retail and SMEs, the bank has set an aggressive target for growth of net interest income this year of 35 per cent, compared with 7.6 per cent last year.
Subhak added that CIMB Thai would try to reduce its cost-to-income ratio to improve its return on equity in 2012 to as much as 13 per cent, compared with 11.1 per cent last year. The ROE of CIMB Thai is lower than CIMB Indonesia’s, he said.