KBank works to lure Japanese SMEs

Kasikornbank (KBank) has partnered with Tokyo Metropolitan SME Support Centre to help assist the small and medium-sized enterprises expected to make the leap to Thailand after the Japanese government urged local firms to invest more overseas.

Banthoon Lamsam, chairman and chief executive officer, said yesterday that under the partnership, KBank’s focus was more on how to assure Japanese planning to do business here that they can be successful rather than on how to provide them credit.

“Investing abroad is something new for SMEs in Japan. They might worry about the environment, so we have to build the relationship and accommodate what they require. The confidence of SMEs will finally lead to transactions,” he said. 

 

Knowledge and info 

KBank will provide knowledge and information about the prospects of the Thai economy and investment as well as in other Asean nations to stimulate business with SMEs from Tokyo. Activities would include business matching and seminars. 

SMEs in heavy industry and machinery in Tokyo are expected to establish their footprint in Thailand with encouragement from their government.

The arrival of Japanese SMEs should not directly impact Thai SMEs because the scale is different, he said. The challenge for Thai SMEs is to think seriously about how to produce unique products that would give them an advantage. They also have to find low-cost operating bases because Thailand is no longer cheap.

Yuji Izawa, chief executive officer of the Tokyo Metropolitan Support Centre, said KBank was chosen to be the first overseas partner for the centre because of its wide knowledge of the SME sector.

 

Market leader

KBank is the market leader in SME lending, with outstanding loans of Bt538.4 billion as of the end of the first half of this year.

KBank has more than 30 staff who can communicate in Japanese. It has also recruited staff from Vietnam, Myanmar and Laos. The centre considers that those staff could also help support the SME members of the centre.

Banthoon said “people” were important for the bank to deal with investment activities from abroad. The competition in banking now is regarded as a talent war and is expected to grow more intense.

The picture of competition in the banking industry has not changed much even though foreigners have become major shareholders because management authority is still handled by Thais. That is the case of Bank of Tokyo Mitsubishi UFJ, which became a major shareholder of Bank of Ayudhya.

Moody’s Investors Service believes that the overall credit profiles of Thai banks will remain stable in the coming quarters as operating conditions improve. The bright outlook for the banking industry is an indicator that the economy is returning to positive circumstances. Lending in the current half is better than the first half. 

For KBank alone, loan growth this year will reach 8 per cent based on forecast GDP expansion of 1.5-2 per cent.

Gross domestic product next year could rise 5 per cent thanks to the improved economic outlook, Banthoon said.