BBC plans to lend more to Chinese corporates
Bangkok Bank (China), a wholly owned subsidiary of Thailand's largest bank, will build its loan portfolio from Chinese corporates to 40 per cent of overall lending in the next three years, due to increased business activity both in mainland China and over
Even though China’s economy is slowing down, some businesses have become more active due to Beijing’s “Go Out” policy and its new focus on domestic consumption, Suwatchai Songwanich, chief executive officer of Bangkok Bank (China) – BBC – said late last week. China is focusing on domestic consumption to comply with its sustainable-growth policy, causing several manufacturers on the mainland to seriously expand production capacity to serve local demand, he said.
For example, a Taiwan-based food producer with operations in China is expanding its plant with an investment of US$120 million (Bt3.91 billion), which BBC aims to support with financing of around $60 million.
The “Go Out” policy, meanwhile, enables the Chinese unit of Bangkok Bank to know which clients have the potential to expand their business in Asean, he said.
A combination of the two policies has therefore persuaded BBC that it can boost its loan proportion accounted for by Chinese corporates to 40 per cent in the next three years, he added. BBC’s loan portfolio is currently split equally between Chinese corporates, multinational companies and Thai companies.
As a small bank in China, BBC decided it should initially tap Thai corporates and multinational companies that were Bangkok Bank customers overseas, but that it should then take the next step in building up a loan portfolio of Chinese corporates, he explained.
Chinese companies plan to invest in Thailand due largely to its geographic location, making it an Asean hub, while Bangkok Bank has footprints across Asean, which can support Chinese businesses in the region, Suwatchai said.
Chinese corporates look upon Thailand as a bridge to entering other markets, and especially Indonesia, where there is high overall purchasing power due to its large population, the CEO said.
Although BBC is a small bank in China, Bangkok Bank’s operations in Thailand and elsewhere in Asean mean Chinese companies know they can be helped in terms of both financial and non-financial services, he added. “This is our strength compared with Chinese banks. They have had a presence in Asean for the past few years, unlike Bangkok Bank, which has had a strong network in Asean for decades,” he said.
