SCB Securities targets private banking
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SCB Securities has revealed a three-year strategic plan (2012-14) to work with its parent Siam Commercial Bank to encourage private banking customers and new-generation investors to enter the stock market, in a bid to boost its brokerage ranking from No 1
SCBS chief executive officer Thongmakul Thongyai said yesterday that liberalisation of the capital market had put pressure on the brokerage business, affecting yield in the first three months of this year.
The Stock Exchange of Thailand needs more time to adjust to the liberalisation because investors are likely not prepared for it. Pricing is not a way for the securities industry to deal with the issue, he said.
SCBS, therefore, has to work together with SCB to get private banking clients to invest through the capital market. Thongmakul said data showed that just 10 per cent of private banking customers invest in the capital market, but they may contribute 75 per cent of total trading volume.
The company will develop new securities products to capture a new generation of wealthy investors who have no experience in such products.
It will support SCB’s investment banking and develop derivatives products for the over-the-counter market such as equity-linked notes and derivative warrants.
It plans to expand its equity-analysis work to cover 130 securities in 20 business segments by 2014, as research is important for helping customers make decisions on investing in stocks.
“To strengthen brokerage services and maintain margin, we have to work together with the bank and develop innovative products and quality research,” he said.
SCBS expects to attract 2,000-5,000 new capital-market accounts this year. Currently, it has 20,000 accounts, of which 40 per cent are active.
The SET has 670,000 accounts but only 170,000 are active, showing that SCBS has room to grow.
Thongmakul said fierce competition and market liberalisation had persuaded the company to focus on non-brokerage business after seeing income from that segment steadily increase each year.
According to its three-year plan, income from non-brokerage business is estimated to increase to 33 per cent from 21 per cent currently. Brokerage income from retail investors is expected to increase to 50 per cent from 40 per cent while the proportion from institutional investors will drop to 17 per cent from 39 per cent now.
By 2014, the firm hopes its ranking will move into the top three from its current 15th place, while market share should grow to 5 per cent from the 3.5 per cent expected this year. Net profit is projected to reach Bt605 million by 2014, compared with Bt391 million expected this year, he said.
