Kiatnakin to focus on wealth management
Kiatnakin Bank, which was set as a commercial bank following the merger with Phatra Capital, plans to focus on wealth management services and adjust its mindset towards fund mobilisation in an effort to generate healthy margins.
“Deposits today cannot beat inflation … we must find funds from other sources and funds from the capital market and wealth management are our focus,” Tawatchai Sudtikitpisan, president and CEO of Kiatnakin Bank, said last week.
The bank would not compete with universal banks that emphasise assets growth. It can find greater profit by expanding products and services in the capital market.
Universal banks use “pricing” to chase deposits to serve loan growth, but the more banks focus on lending, the more their capital will be eaten up, he said.
The merger with Phatra has broadened the bank’s ideas about fund mobilisation while maintaining high margins.
Tawatchai was in charge of the commercial banking business and president of Kiatnakin-Phatra Financial Group.
Phatra has limited capital but the firm has expertise in the capital market and close ties with institutional investors, so the combination of the two firms will support the bank in expanding loans without resorting to pricing.
Kiatnakin Bank is interested in the wealth management business because most of its customers are regarded as affluent to high net-worth, while Phatra’s network can support this area.
Market volatility has also convinced wealthy customers to find reasonable returns for themselves and Kiatnakin–Phatra can supply them a wide range of products and services.
Kiatnakin–Phatra expects the assets under management of wealthy clients to double to Bt600 billion in two to three years.
Wealthy customers come in various types, so services and products should be different to match up with customers’ requirements and lifestyles.
Mass and mass affluent customers should be served by bank branches, while high net-worth clients would be cared for by Phatra.
The group plans to reveal its business direction after reporting its third-quarter results to the Stock Exchange of Thailand.
Kiatnakin Bank’s loan growth this year should be higher than the target of 21 per cent, thanks to growth come from all areas, not just hire purchase.
In the first six months, the bank reported loan growth of 13.5 per cent.
However, the market volatility and expected export slowdown would undermine economic growth, so loan portfolios in the banking industry next year should not be any bigger than this year, he added.
