BAY plans consumer-finance JVs in neighbouring countries
Bank of Ayudhya, the fifth-largest Thai bank by assets, is keen to launch consumer-finance businesses in Laos, Cambodia and Myanmar before the Asean Economic Community (AEC) gets going in 2016, and plans to set up joint-venture companies in the countries.
The bank will form a joint venture in Laos to operate consumer-finance business including auto loans. Details of the JV will be announced in the second quarter, said BAY chief executive officer Janice Van Ekeren.
BAY currently has two branches in Laos. The new JV will operate separately, conducting only consumer-finance business, a segment in which Krungsri Group has expertise.
Van Ekeren said that Laotians are familiar with BAY’s Krungsri Auto and Srisawad Ngern Tid Lor business units. The existing bank branches in Laos will focus on deposit mobilisation and lending, she said.
She added that the bank will upgrade its branches in Laos to be subsidiary companies within the second half of this year in order to expand its network in the country.
In Laos, the cost of opening a branch is more expensive than opening a subsidiary. A foreign bank can set up a subsidiary once it has more than three branches.
Van Ekeren said the bank is seeking a partner in Cambodia to set up a joint venture, based on the same model as the JV in Laos. Details of the JV in Cambodia will be known next year.
BAY will hold majority stakes in the joint-venture companies.
The bank is one of several Thai lenders looking for greater opportunities in Myanmar. It is awaiting a licence from the central bank of Myanmar to open a representative office. The office is expected to be set up soon.
Van Ekeren said BAY targets revenue from its overseas network of 5 per cent of total revenue within three to five years, up from less than 1 per cent at present.
