BBL builds up regional network for Thai clients

Chartsiri Sophonpanich, president of the Kingdom’s largest commercial bank by assets, yesterday said Bangkok Bank used to attach more importance to foreign investors and local clients in markets where it had a presence, because of the relatively few Thai customers it had overseas, but this was now changing.

Bangkok Bank has the largest overseas branch network among Thai banks, with 26 locations in 13 key economies:  two local banks, one each in mainland China and Malaysia; branches in Japan, Hong Kong, Taiwan, Singapore, Indonesia, the Philippines, Vietnam and Laos; branches in the financial centres of New York and London; and a representative office in Myanmar.

The bank opened its first international branch in Hong Kong in 1954, as it wanted to serve Thai customers in the city. 

However, the main customers at its 26 overseas operations have until now been foreign entrepreneurs with exposure in many countries, as Thai companies have had little exposure abroad. But that has all started to change with Thai businesses now preparing to invest overseas,  largely because of the clear focus that the advent of the AEC has given them. 

Chartsiri said revenue from overseas branches currently contributed 17-18 per cent of Bangkok Bank’s income, with Asean branches accounting for one-third of the revenue from international branches.

The proportion from international branches would not change even if the bank opened more branches, he added.

Kosit Panpiemras, executive chairman of Bangkok Bank, said the overseas branch network comprised three customer segments: local clients, foreign customers wanting to expand business to other countries, and Thai companies with businesses abroad.

Given the increase in overseas investment by Thai companies, Bangkok Bank is determined to give more importance to Thai customers, therefore branch network expansion has to be undertaken to ensure the full range of services are available to clients, he said.

In general, Bangkok Bank has one or two branches in each country where it has a presence, but the bank might consider opening more branches in larger economies over the next three to four years to support the businesses of Thai companies and current foreign customers wishing to invest in Asean. 

The bank has branches in all Asean countries except Cambodia and Myanmar. 

It has a representative office in the latter, as the Bank of Myanmar does not allow foreign banks to set up branches.

The bank plans to open a branch in Cambodia, having terminated its previous operation in the country.

Indonesia is a high-potential market for Bangkok Bank, because of foreign customers in mainland China, Taiwan and Singapore having increased business there. Moreover, Thai companies are also planning to invest aggressively in the giant market.

Bangkok Bank founded its first Indonesian branch in Jakarta in 1965. It has now added a sub-branch in the East Java city of Surabaya.

The bank’s outstanding lending in Indonesia is expected to grow to US$700 million (Bt21.5 billion) this year, from $450 million last year. The Indonesian operations represent the bank’s third-largest overseas portfolio, after Vietnam and Singapore.

As the largest economy in Asean, Kosit said Indonesia had room to grow, supported by its great natural resources, its young society and the expansion of foreign investment.

The World Bank estimates that Indonesia’s gross domestic product this year will grow by 6-7 per cent because of robust domestic consumption.

Chalit Tayjasanant, senior vice president and general manager of Bangkok Bank’s Jakarta branch, said the branch’s portfolio comprised corporate loans, with the credit line per customer set at $1million to $2 million. 

The bank aims to add sub-branches in 10 cities in Indonesia in the near future, he said.

Chalit suggested Thai companies planning to invest in Indonesia should carefully study land certificates, as they come in many different types.