KTB targets top spot in global markets business by 2018
KRUNGTHAI Bank aims to be No 1 in the global markets business in Thailand by 2018 after becoming a top-three player last year.
“Even though we ended third for 2015, being No 1 from April to December 17 proved that KTB has capability in the primary market despite the market volatility,” Payong Srivanich, senior executive vice president and head of the bank’s global markets group, said yesterday.
“In the first two months, KTB became No 1 with total underwriting in the primary debt market worth Bt30 billion,” he said.
The global markets division was set up in 2014 under the bank’s seven-year business plan called “three summits”.
The bank wants to close the income gap with the top four banks, so the focus is on global markets.
In the past, KTB had little exposure to global markets. However, it has expanded its foreign-exchange foundation with existing customers who used this service from other banks.
In 2014, about 30 per cent of corporate borrowers used KTB’s global market service. The bank was able to increase that proportion to 40 per cent last year.
In its first year, the market share of KTB’s interbank foreign-exchange business rose to 8.6 per cent from 6.4 per cent.
KTB ranked third in the primary debt capital market after significantly improving its distribution capability since the beginning of last year.
As of April 25, 2015, KTB was No 1 in the debt capital market, but by December 17 it had fallen to third with total underwriting volume of Bt75.1 billion.
To achieve its aspirations, the global market group will concentrate on expanding its FX foundation with existing customers and expanding and enhancing its capital-markets products and distribution capability in order to increase market share in derivatives including commodities, rates and structured notes.
The debt capital market is not expected to grow from the year before. Corporations have no new projects, so they have no need to raise funds.
The secondary debt capital market has room to grow, so this should contribute to the growth of KTB this year.
Of the three debt products in the secondary market, KTB ranked fourth with market share of 6.9 per cent in government bonds of more than one year, fifth in government bonds of less than one year and seventh in corporate bonds.
The primary debt and capital market this year is volatile and more dynamic.
The stock market has been less attractive to foreign investors and if the US Federal Reserve raises its key interest rate in the second half of this year, foreign funds will move to the United States, so the primary market should not grow from last year.
Last year, KTB’s global market business reported revenue rising 30 per cent to more than Bt5 billion.
With the market volatility, the division expects to grow at least 10 per cent this year.
“Global markets need to close |the existing process and control gaps to build a solid foundation for stable and prudent growth,” Payong said.
