Tisco Group takes over retail banking business of StanChart

Chief executive officer Oranuch Apisaksirikul said yesterday that the group would pay Bt5.5 billion for the acquisition of assets from StanChart, whose retail-banking portfolio consists of approximate total assets of Bt41.6 billion and total liabilities of Bt36.1 billion.
Tisco signed the transaction agreement with Standard Chartered Bank (Thai) yesterday morning, and the asset-transfer process will be completed in 2017.
The Bt41.6 billion in new assets will contribute to Tisco’s anticipated loan growth of 15 per cent from the current lending assets of Bt217 billion, which will be consolidated to the group after the transaction is completed.
Oranuch said the acquisition was in line with the group’s strategy to strengthen its retail banking business and increase opportunities to expand its customer base, as Tisco will gain 400,000 customers, both borrowers and depositors, from StanChart. 
The sluggish economy of recent years has slowed growth and the country’s high level of household debt made lending expansion difficult. The StanChart portfolio will increase the number of retail customers served by Tisco as well as its wealth-management business, both of which are priorities for the group, she said.
Tisco has expertise in asset management and bancassurance, and its annual fee income from bancassurance alone has reached Bt3 billion, from Bt300 million five years ago. 
Oranuch said that, without the StanChart portfolio, growth in Tisco’s overall lending next year would have been flat.
Old par
The group’s lending this year will drop again and if the StanChart portfolio is excluded, Tisco’s overall lending in 2017 is expected to witness flat growth as well, she said.Auto loans are a major portfolio at Tisco, and the slowdown of this sector two years ago had an impact on the overall portfolio. 
Tisco notes that 2017 will be the first year that people who took advantage of the previous elected government’s first-car tax incentive are able to sell their vehicles, under the condition that they had to own the vehicle for five years to qualify. However, the bank believes a lot of those people might not want to create new debt after making car payments for five years. Therefore, the bank is sticking to a conservative growth target.
Standard Chartered will help Tisco to take care of the former’s 100,000 credit cards for one year to allow the group time to develop its own credit-card service. Tisco has never issued credit cards before.
All-Ways, a wholly owned subsidiary of Tisco, will be the transferee of the credit-card portfolio and after one year, All-Ways will be renamed Tisco Card Service. The Standard Charted credit card will be renamed the Tisco Card in 2018, Oranuch said.
Tisco Bank will be the transferee of StanChart’s personal lending business, mortgage business, retail banking business, wealth management and individual deposits business.
The Bank of Thailand wants Tisco to focus on a continuity plan to protect credit-card customers. Tisco was audited by the central bank before getting the green light to run the credit-card business.
Standard Chartered will transfer six of its 20 branches to Tisco, and Tisco will receive  more than hundreds of employees from Stan Chart. Currently, Tisco Bank has 56 branches. With Tisco’s focus on digital technology to strengthen its retail banking business, it believes it has sufficient branches. 
Oranuch said that as Thailand became an ageing society, there would be enough wealth among its senior citizens to open opportunities for asset management and bancassurance. 
Around 100,000 of the Standard Chartered customers that Tisco is acquiring are wealthy. She said this was the case because StanChart had for years focused on customers with a steady salary base, and the rate of non-performing loans of its retail customers was below 3 per cent, the same as at Tisco.
Oranuch said Tisco was interested in buying portfolios from other financial institutions if this could help the group expand its customer base, and she added that it had sufficient capital to buy more businesses.