“We see a business opportunity to develop mobile banking and digital platform in Laos when 98 per cent of people use mobile phones. Currently, some 91 per cent still use cash for all transactions. This is a challenge for us to expand our mobile banking and digital platform in this country,” he said.
Currently, Banque Pour Le Commerce Exterieur Lao Public (BCEL) is the only bank in Laos offering the digital platform. The BCEL One mobile app allows customers to transfer funds between accounts, pay utility and phone bills, pay taxes, and more, right from their own mobile phones.
“I use BCEL One Mobile app to transfer money for goods bought at the market as it is easier and it also helps pay all bills. If KBank provides the same service that will easy for me to use,” Phornprasert Suwandara, one of customers visiting a KBank branch in Vientiane, told The Nation recently.
Pattanapong added that the bank is studying the prospects for providing the mobile application and digital platform including QR Code payment in Laos. The company has applied for a licence.
“The Lao government also has the goal of making the country a cashless society. So, this is the right time for the bank to apply and provide the mobile application and digital platform,” he said.
KBank registered in Laos as a locally incorporated institution in 2014 with a registered capital of Bt1.2 billion. It opened its first branch at Pone Si Nuan in 2014 and also its headquarters at Lane Xang Avenue, Vientiane in 2017. The company plans to increase its registered capital to Bt2 billion when the Laos government implements its new bank and finance act, which may be passed at the end of this year or the next year.
“When the new act comes into effect, all banking and finance institutions in Laos will have to have a minimum registered capital of Bt2 billion within five years of the act coming into effect. We will increase our capital following the act,” Pattanapong said.
Since establishing its business in Laos, the company has enjoyed double-digit growth in revenue and net profit due to the country’s strong economic growth.
In 2018, the targets for loans, deposits and trade finance transactions are Bt2.4 billion, Bt1.6 billion and Bt13 billion, respectively. As a result of efficient risk control and management, there is no non-performing loan. The company is targeting total revenue of Bt100 million and net profit of Bt10 million at the end of this year, up 10 per cent year on year.
Meanwhile, the company also aims to bolster loans to Bt3 billion, deposits to Bt2 billion and trade finance transactions to Bt18 billion in 2019. It expects double-digit growth in total revenue and net profit, he said.
KBank’s lending structure in Laos consists of diverse customer groups, namely the government sector (33 per cent), agriculture (19 per cent), construction (15 per cent), commerce (10 per cent), transport (10 per cent), hire-purchase (8 per cent) and food and beverage (6 per cent), respectively. Lending portions to local, government and Thai business sectors stand at 38 per cent, 33 per cent and 29 per cent, respectively.
“Our business expansion in Laos will follow three strategies: opening branches or offices in the form of locally incorporate institutions (LII); foreign bank branches (FBB); and representative offices,” he said.
Currently, the bank has established LIIs in Laos and China, a branch in Cambodia and representative offices in Indonesia, Myanmar, Vietnam and Japan, as well as a strategic partnership with Bank Maspion. The other two strategies are the expansion of the digital platform, focusing on providing services via digital channels, and the establishment of strategic partnerships with local financial institutions.
Laos is one of the most important targets to enhance a service linkage under KBank’s strategy to create a service network in this region, Pattanapong said.
Published : November 26, 2018
By : SOMLUCK SRIMALEE THE NATION VIENTIANE