Bangkok Bank’s China unit less bullish

BBC had been targeting higher growth than that of GDP.
Suwatchai Songwanich, BBC chief executive officer, said China’s economy was performing the same as last year because of government reforms.
He said that included reforming state-owned enterprises and shutting down zombie companies, with the government setting aside 100 billion yuan (Bt543 billion) to help labour sources affected by the unemployment that had resulted from the reform efforts.
BBC used to target double-digit annual growth but last year witnessed flat growth, he said, adding that given the unchanged circumstances in China, the bank had forecast growth this year of 5 per cent.
Suwatchai said BBC had not been affected much by the reform push because most of its customers were not upstream industries. However, the competitive environment in the private sector in China had affected its customers’ profitability, and the bank would help these clients.
He said that to achieve loan growth of 6 per cent, BBC would focus on customers in the service sector because this sector had benefited from domestic consumption. The service sector compared to GDP this year had increased to 56 per cent from 50 per cent last year.
He said that even though the Chinese economy was on a slower growth path, it had not affected China’s “One Belt, One Road” policy.
Suwatchai said Thailand was a key destination for Chinese companies setting up international headquarters. The BBC was collaborating with the People’s Bank of China to promote financial connectivity to facilitate flows of trade and investment between the two countries, he added.
Manop Sangiambut, executive vice president for international banking business at Siam Commercial Bank, said the bank had applied for a branch licence in Shanghai with the priority aim of using this branch to service foreign-currency transactions.
SCB at present has an office in Beijing, and expects the licence application to take about a year to be approved.
If it gets the licence, SCB plans to focus on activities that require foreign currencies in the first two years of operation. After that it will start doing yuan transactions.
SCB has been exposed to Chinese investors who have done business in Thailand.
Manop said the focus in China was to serve Chinese investors who planned to do business in Thailand because the One Belt, One Road strategy was enhancing inbound investors.
Chinese investors account for one-third of those who have received tax incentives from the Board of Investment of Thailand. But those businesses are technology-based and are not very dependent on labour, Manop added.
He said SCB was building a strong relationship with a few large Chinese banks to support jointly Chinese businesses interested in expanding their presence in Thailand.