Merged Kiatnakin-Phatra Group divides expertises

Banyong Pongpanich, chief executive officer of the group and chairman of the executive committee, insisted that despite the recent merger between Kiatnakin Bank and Phatra Capital, both entities should run the businesses in which they have expertise.
The two firms officially merged on September 11.
Banyong told a news conference that the group did not want to be a universal bank because its assets of Bt200 billion would not supported such expansion. It will expand its assets by focusing on retail, particularly auto loans and lending to small and medium-sized enterprises.
As for the capital-market business, it will focus on wealth management and expand comprehensive products of investment banking to the affluent customers of Kiatnakin Bank and Phatra.
Commercial banking remains a key profit generator for the group because of the stable revenue compared with the capital-market business, which can be volatile according to market sentiment, Banyong said.
Tawatchai Sudtikitpisan, chairman for commercial banking and president of Kiatnakin Bank, said the bank would try to expand retail lending. KK has expertise in auto instalment loans especially for used vehicles, and urbanisation in the provinces is an opportunity to expand these products upcountry.
Outstanding car loans are currently Bt120 billion, while SME loans are Bt40 billion.
Tawatchai said the bank projected its auto-loan portfolio next year growing to Bt150 billion and the SME portfolio to Bt50 billion.
Its overall loan growth next year is expected to be no less than 20 per cent compared with about 24 per cent this year, he said.
As it chases deposits, KK branches will focus more on customers with deposits of less than Bt10 million because the cost of funding that customer base is relatively low, and it can also support the cross-selling of such products as insurance.
Aphinant Klewpatinond, chairman of the capital-market business and president of the group, said Phatra Capital, which oversees private clients and investment banking, would offer added value to high-net-worth customers (assets under management, or AUM, of more than Bt30 million) such as structured notes and bond products.
These would be offered to both Phatra and KK clients.
Phatra Capital will broaden its client base as KK customers with deposits of Bt2 million to Bt10 million open accounts with Phatra Capital to manage the portfolio allocations and for advice on investment products with high returns.
Phatra AUM at present are Bt170 billion, and if KK customers with deposits of Bt2 million to Bt10 million add Bt100 billion, total assets will increase to B270 billion.