TBank shifts towards more investment banking

The sixth-largest bank by assets and the market leader in auto loans is leveraging the equity and capital markets through its securities unit in order to structure financial solutions for corporate customers.
This will bring more fee income into the bank in the coming years, he said.
“Lending is the first step in understanding the customers’ requirements, so we must build relationships with customers through lending before offering them investment banking.
“Total financial solutions for corporate customers will help the bank drive its fee-income proportion to 40 per cent in the next few years,” Somjate said.
Major deals from corporate customers on the new platform are expected to be seen by the middle of next year, he said.
Anuwat Luengtaweekul, TBank’s chief financial officer, said investment banking and securities services currently contributed 20 per cent of the bank’s fee income.
After the bank becomes more active in financial services, their proportion of fee income should reach the target of 40 per cent within 18 months.
Somjate said the bank also planned to revamp Internet banking for retail customers to bring it on par with its competitors, after its concentration on ensuring high security had caused it to fall behind in this area.
More Internet banking in the retail segment will help increase profitability, he said.
Despite a slowdown in lending, especially auto loans, in the first half of this year, TBank outperformed some of its peers in terms of the profit growth and the reduction of |non-performing loans.
Compared with the same period last year, the bank’s net profit grew by 7.36 per cent to Bt5.26 billion while its BIS ratio increased to 17.19 per cent and NPLs improved to 3.65 per cent.

NPL reduction
The NPL reduction caused its liquidity coverage ratio to increase to 105.95 per cent from 85.52 per cent as of the end of last year.
The bank is determined to keep the NPL rate below 3 per cent over the next 12 months in order to increase its coverage ratio to 130 per cent, which is the average figure in the banking industry.
Somjate said that as auto loans make up a high proportion of TBank’s portfolio, and repayments were exceeding demand for new lending in this segment, overall loan growth this year was expected to be flat.
Anuwat said the bank’s outstanding auto loans stood at Bt360 billion, or half of its retail banking portfolio.
Even though the auto-loan portfolio is on the decline, it remains the bank’s main one.