Thanachart develops strategy for AEC

Anuwat Luengtaweekul, chief financial officer, said the AEC was expected to attract foreign banks to do business in Thailand. Local banks want to lure retail customers rather than enterprise customers because foreign banks are strong in corporate banking.
TBank’s loan portfolio is basically retail, which accounts for 65 per cent or Bt400 billion, so the bank has to reinforce its marketing of retail products to customers especially through cross-selling to persuade them to purchase more products and services. This also solidifies customer relationships.
For the aggressive strategy, the bank will use the network of Scotiabank to support Thai customers planning to invest in the Asean region. Despite the single market, each country has different regulations, which are a barrier to doing business. The bank is studying the regulations in each Asean country to help its customers by giving them information on business opportunities and the obstructions in running businesses.
Chief executive officer Somjate Moosi-rilert said the retail segment, particularly hire purchase, is the key driver of its loans this year due to the surge in car sales and the launch of the first-car buyer scheme. Hire purchase was the only business to help its lending in the first quarter expand by 1.7 per cent.
Although the first-quarter results were far from the annual growth target of 10 per cent, the prospects for car sales, consumer spending and SME loans would accelerate loan growth in the remaining quarters, he added.
Tirachart Chiracharasporn, head of hire-purchase, said the bank was revising up its forecast for car loans this year from Bt330 billion to more than Bt330 billion, but the new target would have to be approved by the board first.
Anuwat said loan growth in the first half would reach 5 per cent.
TBank’s loans and profitability were ready to take off because the cost of integrating Siam City Bank, a recent acquisition, will gradually decline.
The bank would attempt to improve the cost-to-income ratio from 64 per cent to below 60 per cent by year-end.
The bank would clear Bt4 billion of its remaining non-performing loans within the second half after clearing Bt6 billion of NPLs in the first half. That is expected to bring the NPL ratio down to 5 per cent from 6 per cent now.
However, the domestic political instability is a risk factor for TBank, while it has to also closely monitor the European financial situation.
The banking industry has already made a stress test from the impact of the eurozone crisis on Thailand.