Exim Bank told to draw up 3-year strategy to set up branches abroad

“Exim Bank now is strong enough financially to expand overseas to support Thai companies expanding abroad … especially in Asean countries after the Asean Economic Community became effective this year,” he said after meeting with the finance minister and the bank’s board.

At the meeting, Somkid informed Exim Bank’s board of the government’s policy that it needed the bank to come up with a three-year regional business strategy. The strategy will cover the bank’s business expansion overseas, as well as loan policy for Thai exporters and companies that invest abroad. 

Somkid said some Thai companies were trying to invest in emerging countries where Thai commercial banks do not yet have a footprint. It is in places like that where Exim Bank should be setting up branches. Moreover, even in countries where Thai commercial banks are already operating, such as the CLMV (Cambodia, Laos, Myanmar and Vietnam) sub-region, Exim could be offering a low-interest alternative to Thai businesses there.

Finance Minister Apisak Tantivorawong added that it was government policy that the specialised financial institutions have strong management and cover the areas they were designed to support. The state-run SFIs are Exim Bank, the Small and Medium Enterprise Development Bank of Thailand (SME Bank), Government Housing Bank, Government Savings Bank, and the Bank for Agriculture and Agricultural Cooperatives.

After the meeting yesterday, the Exim Bank will draw up a three-year business plan to propose to the Finance Ministry within two or three weeks. By that time, the bank will have appointed a new president, expected within two weeks.

At the end of 2015, Exim Bank announced net profit of Bt1.52 billion and a total credit outstanding of Bt73.54 billion. Business turnover derived from the bank’s financing activities amounted to Bt136.63 billion, while that from export credit insurance and investment insurance accounted for Bt64.38 billion. 

This year, Exim Bank targets new lending worth more than Bt19 billion, up by 4-5 per cent from last year.

Meanwhile yesterday, SME Bank announced its business strategy for the year. It also reported net profit of Bt341 million for the first two months of 2016.

“When we show strong net profit we can expand our investment to meet our investment target of up to Bt2 billion next year,” the bank’s chairwoman Salinee Wangtal said.

The bank reduced its non-performing loans from Bt23.45 billion, or 27.25 per cent of total loans in January to Bt23.27 billion, or 26.07 per cent, by the end of February. The bank |targets reducing NPLs to Bt22 billion by the end of this month as it follows the business plan it proposed to the State Enterprise Policy Committee, she said.