CIMB Thai outlines three-year plan for |its first foreign branch, in Vientiane

CIMB Thai Bank’s Vientiane branch is the seventh Thai commercial bank and the 35th overall incorporated in Laos.
State-owned banks control more than 60 per cent of the Laotian market in terms of loans and deposits. Last year, the banking industry in Laos had deposits totalling the equivalent of Bt128.3 billion and loans of Bt121.4 billion.
Subhak Siwaraksa, president and chief executive officer of CIMB Thai, said that this year, the first of the three-year business plan, the branch would establish a footprint and build brand awareness among Laotian enterprises of all sizes.
In 2015, the bank aims to broaden its offerings to businesses including payroll accounts. It will focus on Laotian partners of Thai companies to strengthen its network and acquire richer individual customers through wealth-management products.
In 2016, the bank will broaden its product offerings to retail customers, such as home and personal loans, including instalment plans. It will then explore business opportunities in other areas of the country such as Savannakhet.
The bank aims for annual growth of 80 to 100 per cent in terms of loans and deposits. In the first year, it plans to book loans of Bt300 million, Subhak said.
If the branch achieved its annual growth target through 2016, it could break even in 2017, he said.
He pointed out that even though the population of Laos was small, it had posted gradual growth in gross domestic product, driven by construction, manufacturing and foreign investment in hydropower. Backing the power-generation industry would be a focus of the new branch.
Laos has recorded average GDP growth of 7.6 per cent for the past five years with healthy growth prospects ahead. The Asian Development Bank has predicted growth of 7.3 per cent this year and 7.5 per cent for 2015.
Growth last year was generated mainly by the service sector, largely supported by strong financing in the banking sector. Household spending moved up in line with higher incomes and retail and wholesale trade business expanded significantly.
Tourism grew by 12 per cent, with 3.7 million arrivals in 2013, contributing to related businesses such as hotels, restaurants and transport. The communications sector witnessed two-digit growth buoyed by the fast-growing mobile-phone and Internet businesses.
The Vientiane branch is CIMB Thai’s first abroad, and is also CIMB Group’s first presence in Laos. CIMB Group is now present in nine of the 10 Asean nations.