KTB turns to private sector in bid to boost fee income

Kittiya Todhanakasem, first senior executive vice president and chief financial officer, said that in an effort to increase non-interest income, the bank had broadened its investment-banking activities over the past 10 years to include treasury products, foreign exchange and derivatives aimed at the private sector.
Previously, KTB’s fee-based income was not large, she said, adding that the bank had to change its mindset to derive revenue from fee-based income as well as interest income from the Thai private sector, which is growing not only at home but also overseas.
To provide comprehensive products and services, KTB went into the investment-banking business by establishing KTB Advisory and setting up joint-venture securities and insurance companies.
“We have fee-based income coming from several sources. We have to use key performance indicators to define our products and services so they serve market requirements,” she said.
The bank has steadily organised more products and services at each subsidiary to ensure healthy fee income.
“We have followed the activities of customers and offered products [that are tailored] to them,” she said.
“Earlier, the private sector was less familiar with KTB’s investment-banking services, because the bank was founded to serve the state sec-|tor. The private sector, especial-ly wholesale enterprises, has |provided positive feedback to |the bank and some companies |are surprised to find that KTB has a whole range of investment-banking products, much like commercial banks and foreign banks.”
The comprehensive products and services have led to an increase in lending to the corporate sector, which has become more satisfied with KTB’s services, she said.
Kittiya said non-interest income had gradually increased by 15-20 per cent over the past five years, now accounting for 20 per cent of the total income of the bank.
The bank plans to do more marketing activities for its investment-banking business and will attempt to create an international brand to make its products and services known among multinational firms.
KTB aims to boost the proportion of non-interest income to 25-30 per cent of the total.
In 2013 the bank will increasingly target medium-sized corporations with annual sales revenue of Bt200 million to Bt500 million, Kittiya said. Medium-sized corporations are increasing their activities in the provinces because of growing urbanisation. KTB has a large network of branches upcountry and in the border provinces, creating an opportunity for investment-banking business and transactional services, she said.