Greater KBank focus on private banking service

KBank entered private banking five years ago to serve wealthy individuals who have assets under management of Bt50 million or more. Since then the number of high-net-worth customers has grown by 250 per cent to 6,500 with total AUM of Bt500 billion.
“The double-digit growth of the economy in the provinces against single-digit in Bangkok raises the number of wealthy people upcountry, especially in the main cities. Hence we think we have an opportunity to grow from [serving] rich people in the provinces,” said Pakorn Partnanapat, executive vice president.
The bank expects significantly higher growth of its high-net-worth customer base upcountry than in Bangkok.
KBank estimates the AUM in this category will grow by 12 per cent this year and income from acting as a sales agency will grow by 24 per cent.
Jirawat Supornpaibul, head of private banking, said rich people in the provinces were primarily looking for safe investments to preserve their lifestyles, but those in the main cities had more understanding about aggressive products.
KBank will use branch managers who have close relationships with provincial customers to refer them to financial advisers and private bankers to help them plan their investments and assets allocation based on risk appetite, he said.
It will offer safe investments, long-term investments and aspiration investments, though 3,000 of its 6,500 high-net-worth customers still prefer conservative investments to ensure a solidly comfortable lifestyle.
As for the other 3,500, KBank will try to persuade them to migrate from moderate to more aggressive investments, as the bank this year will welcome more allies to sell investment products, particularly funds, Jirawat said.
He added that Kbank was ready to sell products of all brands under the concept of “no boundary for investment” as customers had required more investments from other brands. The bank considers this will lead to healthy fee income in the future.
Manulife Asset Management and Aberdeen Asset Management are two partners through which KBank will offer funds to its private-banking customers, he said.
Income from K-Private Banking last year was Bt1.8 billion, of which Bt800 million was sales-agent fee income and Bt1 billion interest margin from deposit mobilisation to the bank for lending.
Income from private banking this year is projected to grow by 24 per cent, mainly from sales-agent fees, he said.