Initial HSBC transfer to BAY unit
Krungsri Consumer, a Bank of Ayudhya (BAY) unit operating credit cards as well as personal and auto loans, will transfer all 300 staff of HSBC (Thailand) and the local retail banking business of HSBC, excluding credit cards, to its portfolio next month.
HSBC’s local credit cards will be integrated into Krungsri cards in November, as BAY first wants to ensure it can deliver the same level of service to HSBC cardholders as they used to receive at HSBC, Philip Tan, head of consumer finance at Krungsri Consumer, said yesterday.
The move is part of the agreement with the UK-based banking giant to dispose of its Thailand-based retail banking and wealth management arm to Krungsri Group for Bt3.56 billion. The HSBC credit-card portfolio comprises some 500,000 cards with outstanding credit of Bt9 billion. When it is integrated under the Krungsri umbrella, it will give BAY a total of about 5 million cards.
Krungsri Consumer consists of four companies: Ayudhya Capital Services, which operates the First Choice credit card and the Power Buy Card; Krungsri Credit Card, which operates Krungsri, HomePro and AIA credit cards; Tesco Card Services, which runs the Tesco credit card and Tesco Premier card operations; and General Card Services, which runs the Central and Simple credit cards.
Tan said Krungsri Consumer had set its sights on growing both organically and inorganically, with the former focus being on customer-centricity to create brand loyalty, while for the latter the company will carefully consider which type of portfolio can strengthen existing businesses.
The acquisition of the HSBC portfolio is a good example of a value deal, with BAY receiving good-quality assets with a premium-segment customer base, which can strengthen its existing Platinum cards and the Central credit card, the executive said.
"We are often approached, without having to look for targets, because the sellers [of portfolios] know Krungsri is able to [buy] and quickly implement [operations]," he added.
Meanwhile, personal-loan portfolios represent an area in which Krungsri Consumer also wants to buy if a business wants to offload its operations, Tan said.
Krungsri Consumer’s overall portfolio is worth Bt225 billion, of which credit-card business accounts for Bt186 billion and the rest is auto and personal loans. The Bt225 billion represents 45 per cent of BAY’s overall portfolio.
He said BAY’s ambition is to be a universal bank providing a wide variety of services to customers. The proportion of retail banking should therefore increase to 50 per cent to achieve this goal.
"It is our challenge to boost the size of the portfolio of Krungsri Consumer by Bt100 billion to more than Bt300 billion in order to ensure we are a universal bank. Achieving the additional Bt100 billion will not be easy, and we might need time to become a universal bank," he said.
Sukdee Chongmankhong, managing director of Krungsri Consumer, said the value of in-force credit cards, auto sales finance and personal loans currently stood at Bt4.7 billion.
The group targets its number of cards this year growing by 17 per cent to 5.6 million, including the 500,000 cards to be transferred from HSBC.
