KBank, Aozora Bank support M&A deals between Japanese and Thai SMEs

According to KBank president Predee Daochai, Japan’s “Thailand+1” policy that makes Thailand the hub of its private sector’s foreign investments has drawn a number of Japanese investors here as well as to other Asean markets. 

The wholly owned company has been a popular business platform among Japanese operators in Thailand, while others are seeking investment partners or M&A deals with Thai firms as they have better insights in the local and neighbouring markets. On the other hand, Thai operators welcome Japanese partners for their business expansion and advanced business know-how. 

KBank yesterday signed a cooperative agreement with Aozora Bank to support Thai and Japanese operators seeking business partners. 

Aozora is the first bank to partner KBank in M&A activities and the 29th Japanese partner bank of KBank. 

Under the agreement, activities to promote bilateral investments between the two countries will be organised, including seminars to enhance knowledge of business and investment opportunities in Thailand for Japanese businesses, business-matching activities, and Thai-Japanese M&A deals. This is expected to advance bilateral investments for both markets, while attracting Japanese investors – particularly operators of SMEs – to Thailand.

This collaboration will enable KBank to offer a full range of services to Japanese customers – in addition to the general information and financial services currently provided – through 28 Japanese banks in Thailand as well as Japanese organisations from the public and private sectors. On the other hand, business opportunities for Thai companies will be enhanced, in addition to financial support, through their Japanese business partners as they are expected to share technologies, experience and relevant knowledge with their Thai counterparts.

Aozora Bank’s chief executive officer, Shinsuke Baba, added that in recent years, business development in Thailand, which plays a significant role in the Asean economy, has become an important growth strategy for Japanese companies. 

This partnership with KBank will allow Aozora to build a framework for providing enhanced cross-border M&A advisory services to meet its customers’ business needs in Thailand. The bank is already collaborating with KBank and great results are expected. 

Thanks to the largest SME business network and efficient care of Japanese SMEs in Thailand, Aozora Bank chose KBank as its business partner. The Japanese bank had previously signed partnership agreements with two other foreign financial institutions in Asean – Oversea-Chinese Banking and Bank Central Asia, the top-tier banks in Singapore and Indonesia respectively. 

According to the Japanese Chamber of Commerce, more than 7,000 Japanese companies have established operations in Thailand, almost half of them small or medium-sized businesses. Between 2005 and 2010, Japan was ranked top among foreign investors in Thailand, and more Japanese investors – particularly SME operators – have shown interest in entering the Thai market. 

According to various surveys, Thailand has always been among the top targets of Japanese partners. Despite the recent increase in the minimum wage, Thailand’s basic infrastructures remain an appealing advantage compared with its peers, while its location is suitable as the regional production hub for goods distribution to other Asean markets. 

It is possible that business operators from Japan will focus their Thai investment in products with higher value, such as goods with more complex manufacturing processes with advanced technologies and designs, or products that need skilled labour.

Aozora Bank has more than Bt1.3 trillion in assets and 20 branches in Japan. It also has representative offices in New York, Shanghai and Singapore as well as a subsidiary in Hong Kong.