BBL's Asean expansion paves way for international agenda

Asean accounts for half of BBL’s international loans, which amount to 16 per cent of its Bt1.78 trillion loan portfolio.

In BBL’s recent meeting with local securities analysts, the message was that the Asean branches were key to the growth of Bangkok Bank, backed by cross-border trade.

The bank’s international business is targeted to increase by 6-8 per cent this year, compared to the domestic loan growth target of 3-5 per cent.

Chaiyarit Anuchitworawong, executive vice president in charge of international business, said that BBL was filling the jigsaw puzzle of Asean when it introduced a Phnom Penh branch on December 30.

It will open another branch in Pakse, Laos next quarter and a full branch in Yangon in the middle of this year. Bangkok Bank is one of nine foreign banks that have been awarded a banking licence in Myanmar.

Thailand’s largest bank by assets will end this year with 31 branches in 14 countries.

The end of this year will also see the full implementation of the Asean Economic Community (AEC), and Bangkok Bank, which boats the largest Asean network among Thai banks, is showing full readiness to support inbound-outbound transactions.

Singapore, Indonesia and Malaysia branches are the top profit contributors to the bank, but it believes Myanmar will outshine them. 

Both Thai and multinational corporate customers of Bangkok Bank’s Asian branches are lining up to use the bank’s credit and financial facilities.

“The Yangon branch can start logging loans in the second half of this year after we are formally opened in the middle of this year,” he said.

Last Friday, the bank presented to its AEC business forum in Bangkok its branch managers in eight Asean nations including senior vice president Kanet Buranasin, who will be the Yangon branch manager.

Those managers have helped provide comprehensive investment information to corporate and SME customers that are seriously interested in Asean.

All branch managers were upbeat about the AEC. Even though the AEC is expected to pose both opportunities and challenges, most of them still believe loans could rise by double digits from now on.

Kanet said foreign banks in Myanmar will have to spend time adjusting to the limited conditions in the country, but investment opportunities abound thanks to the huge purchasing power there.

Yiamsri Ubonpong, manager of the Cambodian branch, said that since BBL set up its branch after others, what it will do is speed up its role in facilitating financial and non-financial services to Thai companies that are doing business in Cambodia or are interested in entering the country. 

Competition in the banking industry in Cambodia is intense but with Bangkok Bank’s network in Asean and Cambodians’ welcome for foreign investment, loans should skyrocket in the first year of operations, she said.

Dutsadee Khemapunmanut, vice president and manager of the Manila branch in the Philippines, said the Philippines is likely to be less active than the CLMV (Cambodia, Laos, Myanmar and Vietnam).

The country’s attraction is its service industry, where demand for loans might not be as strong as with heavier industries.

“We have told the head office that the Manila branch might not grow aggressively because the main investment here is in the service sector,” he said.

The Philippine’s GDP surged 7.8 per cent last year and is estimated by its government to leap by 6.1 per cent this year. 

The government there has attempted to lure foreign investment to create jobs by injecting funds into infrastructure. The unemployment rate there was 7 per cent.

The Manila branch plans to boost loans from Thai customers especially those in food processing and hotels. Thai corporations account for 30 per cent of its loan portfolio.

From Thailand, Erawan will launch its budget hotel HOP INN there and Narai Hotel plans to do the same. The Manila branch hopes to land some lending business with them.

The Manila branch targets loan growth at 30-40 per cent, similar to last year.

EVP Chaiyarit said the bank hopes that the Manila branch will contribute healthy growth from the arrival of the AEC, while Vietnam is expected to resume impressive growth after its economic outlook brightens up.

Tharabodee Serng-Adichaiwit, senior vice president, general manager of Vietnam and manager of the Ho Chi Minh City branch, said the bank targets loan growth of 20 per cent, but it will discuss the matter 

 with the regulator, which has capped the banking industry’s loan growth at 13 per cent. 

With the emergence of the AEC and referrals from Bangkok Bank’s network especially in China, Singapore and Malaysia, the bank believes it can beat the 13-per-cent loan limit.

Vietnam is an investment destination because of its reasonable labour costs, stable currency, low inflation and rapidly developing middle class.

The bank’s two Vietnam branches in Ho Chi Minh City and Hanoi are enough to accommodate the flows of investment, Tharabodee added.