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Thai institutions join global banking industry offering services in CLMV

Jan 05. 2015
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By Sucheera Pinijparakarn
The Na

The approach of the Asean Economic Community is not only attracting foreign banks to establish a presence in the region but major Thai banks are also moving aggressively into neighbouring countries, especially the fast-growing CLMV markets - Cambodia, Lao

Foreign banks that have been recognised for their expertise in corporate banking have moved in to serve corporate clients that are investing heavily in this region. Thai banks have been doing the same, as they want to serve companies from this country, even though the costs of operating external branches might be high.

Bangkok Bank, this country’s largest, has thus far been the big player in the international market. It currently has 28 overseas branches, one representative office and two wholly owned subsidiaries in 13 countries.

Its major customers are Thai companies and multinational corporates.

This year, BBL will be opening more branches in CLMV. In Myanmar, it is the only Thai bank to receive a licence to open a branch, and it is ready to open branches in Pakse, Laos, and in Phnom Penh, Cambodia.

Thai companies will have confidence to do business offshore if they have a partner to help them with regulations and funding. Having access to a branch of a familiar bank will be welcomed by Thai clients that want assistance outside their own country, both financial and non-financial, said Chaiyarit Anuchitworawaong, executive vice president of BBL.

BBL’s strategy is to open branches in overseas locations where it sees sufficient demand, both from Thai firms and multinationals.

Kasikornbank recently opened its first branch in Vientiane and aims to open another branch in Laos in 2016. KBank is the first financial institution from Thailand to be permitted to provide a full range of services in that country.

In Laos, KBank set up a wholly owned subsidiary as a local bank, which would give it operational flexibility. As a local bank, it can set up more automated teller machines than a branch, which can operate ATMs in front of the outlet only. Thailand’s fourth-largest bank by assets wants to attract local retail customers, especially private individuals in Laos, beside Thai and Laotian businesses. KBank has set up “The Wisdom Lounge” and a safe-box service for rich Laotians, as it also does in Thailand.

Bank president Predee Daochai said KBank needed to establish branch offices overseas to provide convenient services to Thai clients who have exposure abroad. It will offer investment advisory services, providing information regarding the economy, industry and investment rules and regulations in Laos.

Before the locally incorporated institution was launched, KBank had been servicing customers familiar with its cross-border services from branches in Nong Khai, Ubon Ratchathani and Udon Thani.

Krungsri Group, which includes Bank of Ayudhya, Thailand’s fifth-largest by assets, plans to have a presence in Laos, Cambodia and Vietnam within three years to serve local people.

Bank of Ayudhya has been operating in Laos since 1994, when it opened its first branch in Vientiane. The second branch opened in Savannakhet province in 2009.

The bank has invested in a new banking platform to support increasing business activities in Laos by introducing new products such as a payroll system, bill payments with barcodes, and cashless health-insurance policies.

It recently launched credit cards and installed ATMs, partnering with Banque pour le Commerce Exterieur Lao, and successfully linked Krungsri’s Thai ATM network to BCEL.

BCEL cardholders are able to withdraw money from Krungsri ATMs when travelling in Thailand.

Additionally, Krungsri has entered a joint-venture agreement with Unity Capital Company, a Vientiane-based consumer finance company, to offer products including instalment loans for cars and other items under Krungsri Leasing Services.

The rapid developments in Laos, Cambodia and Vietnam are opportunities for Krungsri consumer finances, instalment and unsecured lending.

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