Bangkok Bank (BBL) plans to be more aggressive in overseas business expansion, budgeting around Bt5 billion to upgrade four of its branches in China into a local bank, and is also seeking a presence in India, to capitalise on the country's economic boom.

Executive chairman Piti Sithi-Amnual said the bank will apply for a local bank licence from the Chinese government, once foreign banks are allowed to operate as local banks in the country. The bank would use funds of around Bt5 billion for this plan as local banks in China are required to have a minimum registered capital of RMB1 billion (Bt4.3 billion).

"When we have a local-bank licence in China, the bank will have more potential to do business in the country. With the licence, we can offer financial services similar to those by Chinese local banks," Piti said.

Bangkok Bank's four branches in China are currently allowed to offer six main financial services to Thai and overseas investors: deposit accounts, funds transfer, foreign exchange, trade finance, US dollar-based loans, and letters of guarantee.

The bank may upgrade one of its four China branches to be the headquarters. The four branches in China are located in Shanghai, Shantou, Xiamen, and Beijing.

Piti said the bank also plans to open overseas branches in India, as the country's gross domestic product (GDP) growth rate is close to China's at 8 to 9 per cent. The bank's target group is the Indian middle class of around 300 million. This is quite a large base for the bank's business expansion. 

"It isn't easy to do business in India, hence the bank may look for a local business partner. This is an important factor to which the bank will pay close attention as the first priority," he said.

Thailand's largest bank has a total of 22 overseas outlets, including four branches in China, four in Hong Kong, and two in Japan. Various other branches are located in Indonesia, Laos, Burma, the Philippines, Singapore, Malaysia, the UK and the US. 

President Chartsiri Sophonpanich said Bangkok Bank recently has bought a 10-per-cent stake in Bumrungrad International (BIL). The investment is contingent for its overseas business expansion.

BIL, a subsidiary of Bumrungrad Hospital, operates as a holding company for investment in overseas private hospitals through joint ventures with local hospitals and also provides management services. Bangkok Bank also holds a 1.09-per-cent stake in Bumrungrad Hospital.

Somruedi Banchongduang

The Nation