BBL, Krungsri boost regional focus as AEC nears

The Pakse branch is a strategic location for the bank in connecting business from southern Laos to Cambodia, where the bank reopened in the middle of this year, Kobsak Pootrakool, executive vice president of BBL’s International Banking Group, said.

Even though Laos is a small country, he said it had rich natural resources, which were attracting investment flows.

Moreover, Pakse is close to the border with Cambodia and the Thai province of Ubon Ratchathani.

The CLMV – Cambodia, Laos, Myanmar and Vietnam – area is currently the main focus for Bangkok Bank, followed by Indonesia, where it has three branches.

Indonesia is a priority market because of its huge population, high purchasing power and reasonable labour costs, he said.

At the Pakse branch, the bank will pay attention to tapping local corporates as it does in other markets, as they can become potential partners for Thai companies or multinationals keen on doing business in southern Cambodia, he explained.

“One thing that make us different from other banks is that we know our local customers well, which means that when Thai corporates want to seek partners or form joint-venture companies, we can suggest potential local partners to them – and this helps businesses to meet their short-term goals,” Kobsak said.

He said the bank was seeing more competition given the AEC – Asean Economic Community – was about to start and that included other Thai banks seriously expanding into CLMV markets.

Bangkok Bank, therefore, had to catch up with this development in order to adjust itself for the post- implementation era.

Krungsri, meanwhile, is another Thai bank seeking to be a front-runner in the AEC, as it is backed by its majority owner, Mitsubishi UFJ Financial Group (MUFG).

Noriaki Goto, president and chief executive officer of Krungsri, said that with MUFG’s regional presence in 12 key markets in Asia, the Japanese bank was well-positioned to support Krungsri clients to grow their businesses outside Thailand, as well as servicing potential and MUFG customers in exploring business opportunities in Thailand and other Asean countries.

 

‘AEC will intensify competition’ 

MUFG and Krungsri have the capability to provide a one-stop service for total financial solu-tions, including cash management, trade finance, foreign exchange and derivatives, investment banking and project finance, the CEO said.

The challenge for Krungsri in the single AEC market is likely to be intensified competition among key players in the banking sector, both domestically and regionally. 

Banks with broad coverage in the region and international banking expertise were likely to have a stronger competitive advantage, he believed.

For Krungsri, the combined CLMV market is the priority, and it is taking a lead in leveraging leadership in consumer finance, particularly in the area of personal and auto finance, as well as microfinance, while harnessing MUFG networks in corporate segments, Goto said.

“In Laos, we currently operate two branches, in Vientiane and Savannakhet, by providing full financial services to commer-|cial clients and retail customers. We have also set up a joint venture with a local partner in providing auto finance and sales-finance services to Lao consumers,” he added. 

In Myanmar, Krungsri has a representative office in Yangon, and MUFG’s newly established presence in the city through its BTMU branch will support Krungsri clients in their financial-service needs – for example, lending, international money transfer and currency exchange.

Krungsri employees have also been seconded to BTMU’s Yangon branch.