KBank aims high as ASEAN+3 era nears

KBank executive vice president Songpol Chevapanyaroj said that in terms of volume, multilateral trade among Asean+3 nations accounted for 25 per cent of global trade, against just 7 per cent for intra-Asean trade alone.
The bank predicts that the combined gross domestic product of Asean, China, South Korea and Japan will grow by 5.1 per cent next year. Trade volume is expected to expand in line with this figure, and the trade-finance business of KBank will therefore increase as well, he said.
The bank’s transactional banking fees, excluding foreign exchange, next year are expected to reach Bt1.9 billion, against Bt1.5 billion this year.
Non-interest income from international trade has gradually risen to nearly 40 per cent, and could climb to 50 per cent in the near future as a result of Asean+3 free trade and the upcoming Asean Economic Community (AEC) in 2015, he added.
The bank’s focus is on how to help Thai businesses reap the benefits of Asian trade expansion for companies in each of three stages of development: the initial stage, the growth stage and the mature stage.
KBank is striving to do this via a combination of banking models: joining with Japanese banks, which is the inbound model; through its representative offices in Asean countries, which is the outbound model; and using its own advisory services in Thailand.
This is reflected in its aim to provide products and services as an Asian bank, said the executive. Initial-stage businesses require country analysis and industry analysis, advice on regulations, and help in arranging business trips.
Growth-stage businesses need trading and investment partners, product sourcing, help with cross-border financial transactions, fund-raising and project consultancy.
Mature-stage enterprises, meanwhile, need help with day-to-day overseas operations, fund management and value-chain management.

ASEAN-WIDE COVERAGE
KBank will open a representative office in Myanmar next month, as well as an additional office in Indonesia. The bank also plans to engage additional partner banks in Malaysia, the Philippines and Brunei next year, giving it banking partners throughout Asean, Songpol said.
Of the three “Plus” countries, China in particular has increased its trading in Asean, as Southeast Asian countries are seen to have several strengths and could be regional production hubs and sources of materials for Asian nations linked to Asean via multilateral agreements.
Trade activity in upper-Asean countries is therefore expected to rise further, which is an opportunity for Thailand to play the role of trading gateway, while Indonesia is the gateway for lower-Asean countries, he said.
“Thai companies must learn to find trading partners and source materials from outside countries, apart from considering production-base investment overseas, because labour costs in Asean in the next few years will not differ much from country to country,” he added.
The coming into force of the AEC in 2015 will not only present investment opportunities but also the chance to expand trade, which means Thai corporates require advice on markets, regulations and business-matching to ensure they face low barriers when expanding their business in the region.
Fewer than 10 per cent of the bank’s business clients have reported an unclear picture on their investment in the region. They cite the fragile economy of some countries, which need more time for developing their infrastructure, Songpol said.
He said Cambodia, Laos, Myanmar and Vietnam were well placed for labour-intensive production and natural resources, making them the spotlight for China, Japan and South Korea. Indonesia and Malaysia, meanwhile, are attractive because of their high purchasing power.