With China experience, Kbank eyes Asean trade finance
Kasikornbank is leveraging its experience in China to speed up its establishment in Asean by focusing on international trade finance more than providing credit.
KBank has been in China since 1996 and has a branch in Shenzhen, Chengdu and Hong Kong as well as a sub-branch in Longgang.
Even though China is facing the challenge of returning to healthy economic growth, KBank said that the country was attempting to drive its growth through investment and trade activities in Asean – its priority focus.
“In fact, China is not that interested in Thailand – they are interested in Asean [as a whole],” said Pipit Aneaknithi, executive vice president and head of the new world business division at the bank.
“Therefore, what the bank is doing is trying to work out how to integrate its footprint in Asean to support what China is doing.
“We might limit our loan portfolio at Bt10 billion in China because we are focusing more on trade finance in accordance with the changing dynamics of the global economic.
“The Basel III forces financial institutions to focus on capital to work against the risk. Therefore, revenue from lending is changing to revenue from transactional.”
Pipit said that KBank started its trade finance business at its branches in China last year to tap the wave of trade activities between China and Asean. Trade finance volumes at KBank’s China network was Bt40 billion.
He said that the bank had positioned itself in China as a knowledge organisation more than a lender and on several occasions had matched investors from China with suppliers in Thailand.
It also changed its core banking at its branches in China last year and trained 153 Chinese staff to enhance its organisation capability.
The bank set up a head office at its Shenzhen branch – what it called its special project management office – to increase its flexibility in supporting business transactions in China and when China was dealing with Asean.
“The special project management office in China is similar to the head office in Bangkok. We have our own human resource department to recruit local people because the most difficult thing is recruiting sufficient people to accommodate the business,” he said.
He said the office was part of the bank’s effort to show that it was ready to support the activities of Chinese companies.
KBank planned to apply for a local bank licence in China and a license to open a branch in Shanghai by the end of the year.
This year was a year of activating connectivity to support its customers. Next year the bank would intensify the connectivity, and in 2017 it would combine its footprint regionally in human resources, information technology and in fortifying its position in the Asean-plus-3 market.
He said that Kbank needed to speed up its footprint in Asean to support international trade between China and Asean.
The bank was a major player in using yuan as a trade settlement and in Thailand it had a market share of over 50 per cent.
