KBank to help find alternative funding sources
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Kasikornbank says it has adjusted its role from assisting corporates with loans to helping them find alternative sources of funds.
“The economic outlook in 2015 is likely to be better than 2014 but what we are concerned about is the global oil-price slump affecting commodity prices, particularly agricultural products, making the value of export products decline as well,” said Vasin Vanichvoranun, KBank executive vice president.
“Therefore, corporate demand for loans will not increase much because they will have more choice in raising funds to reduce risk, and the bank should adjust its role in line with customer movement.”
Vasin said the bank had maintained its loan-growth target for corporate banking at 4-7 per cent for 2015, a similar figure as 2014, based on the assumption that government infrastructure projects worth Bt250 billion would be injected into the economy next year.
However, he said the negative environment from the global economy, coupled with the oil-price slump and financial-market volatility such as Russia raising interest rates to 17 per cent, could put pressure on foreign exchange and interest rates in emerging markets.
He said the bank was focused more on increasing fee income from corporate banking and had targeted it reaching 50 per cent of its total revenue within three years. It is at 45 per cent currently.
Vasin said corporate fee income came mainly from transactional banking and deals.
For deal fees, there are many companies planning to stage initial public offerings and KBank has two in the pipeline at present.
Vasin said deal-based revenue in 2014 might end up lower than targeted because the market was not supporting corporates to issue IPOs, while revenue in transactional banking was higher than targeted because it was being driven by trade finance.
He said foreign-exchange activities had declined because of the baht’s depreciation, causing enterprises to reduce currency hedging.
KBank yesterday launched an electronic domestic letter of credit in a bid to help drive fee income from transactional banking.
Vasin said the new product would promote operational efficiency for businesses that would face intense competition upon the full implementation of the Asean Economic Community at the end of next year.
He said companies would be able to save time and costs with document preparation, reception and delivery, while being able to monitor a document’s status anywhere at any time.
The service will soon be offered to other supply chains, he said.
