BAY eyeing regional expansion under AEC
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Bank of Ayudhya will focus on regional expansion under its 2012-20 business plan as the Asean Economic Community unfolds by 2015.
“We are setting a strategy on how to participate in the opportunities from the AEC,” Mark Arnold, president and chief executive officer of BAY, the country’s fifth-largest bank, said yesterday.
The AEC might form the next phase of the five-year plan, which will be revealed by the end of next quarter, after it completes the first phase of the plan regarding return on equity. The bank expects to rank in the top three in ROE by the end of the current second quarter.
First-quarter ROE was 14 per cent, while assets reached Bt944 billion. ROE in this quarter should be at least 14 per cent or higher to ensure the bank’s place in the top three. Assets should grow to Bt1 trillion.
BAY is studying how to broaden its regional coverage to deal with the establishment of the economic community in 2015 because the AEC presents opportunities for Thai banks.
The chief of BAY could not disclose the business model including branch expansion in Asean, but said Myanmar might get a representative office.
Retail loan growth
BAY runs three branches in Asia – one in Hong Kong and two in Laos.
In the domestic market, consumption fuelled by government policies has supported retail loan growth. Retail now represents half of BAY’s loan portfolio.
Lending this quarter is still brisk, as it was in the first three months, when BAY’s performing loans grew 3.5 per cent. The retail segment was particularly active, up by 7 per cent with the acquisition of HSBC’s Thailand retail banking business.
Microfinance through Srisawat, Krungsri Leasing, Krungsri Factoring and Krungsri Auto is among the businesses with potential to drive the bank’s growth, Arnold said.
The bank will consider raising its 11-per-cent loan-growth target for the year after seeing the solid figures for the first half. To support growth, the bank remains open to mergers and acquisitions after taking over HSBC’s retail banking business last quarter, but it has not yet seen what potential targets are around.
In the past two years, BAY has poured more than Bt3.6 billion into upgrading its information system in terms of core banking, electronic banking and branch operations.
The improvement in technology and remodelling of branches allow the bank to increase its business and develop products to reach more customers in the second half.
The bank yesterday launched Krungsri Saving Mee Tae Dai, an innovative savings product paying interest at up to 2.9 per cent.
The minimum deposit is Bt500 but no minimum balance is required.
The top rate applies to deposits of between Bt100,000 and Bt10 million, he added.
Kris Chantanotoke, an executive vice president, said the product aimed to attract new customers, customers with no savings account in their portfolio and customers desiring liquidity for transactions related to investment or bill payments.
BAY hopes to draw more than Bt50 billion in deposits from the special product this year.
