Financial services GSB

The Government Savings Bank and the ExportImport Bank of Thailand have agreed to share branch operations, with the aim of making financial services more accessible for potential exporters.

GSB president and chief executive Lersuk Chuladesa and Exim Bank president Apichai Boontherawara signed a memorandum of understanding yesterday launching their cooperation under a scheme known as "One Branch Two Banks". The dual branches will provide international banking business, export credit insurance, loans, jointventure arrangements and other financial facilities.

Since Exim Bank has only eight branches at present, the arrangement will allow it to expand its financial services at minimum cost, Lersuk said. The GSB has about 800 branches around the country.

Apichai said local entrepreneurs and communitybased enterprises would find it easier to access credit and other export services from Exim Bank, which specialises in lending to exporters. The GSB, meanwhile, has a strong base of depositors.

In some cases, the two banks plan to provide loans jointly.

Under their agreement, Exim Bank will provide international tradefinancing services like letters of credit and export credit insurance to GSB clients. It is believed this will boost their confidence in launching or expanding export business, particularly in new export markets. At the same time, Exim Bank's clients will be able to carry out banking transactions, such as money trans¬fers and loan payments, over the counter or via ATMs at GSB branches.

The pilot service of "One Branch Two Banks" will begin this year at two GSB branches - on Tiwanont Road in Bangkok and Tambon Klong Suan Plu in Ayutthaya province - while Exim bank will introduce GSB services in Bangkok at its headquarters and Rama II and Rama IV branches.

Lersuk and Apichai expect collaboration between the two banks to generate Bt1 billion worth of transactions each month. In the first year, Exim Bank's international business transactions are expected to reach Bt500 million, and they say credit lines approved by the pilot branches should amount to Bt 1 billion.

The GSB has excess liquidity amounting to about Bt60 billion. With its strong deposit base of about Bt670 billion and Bt80 billion in capital, it will not be affected by the present US financial crisis, Lersuk said.

Moreover, the GSB expects more deposits to flow into the bank in the next five years, due to reduced lev¬els of deposit insurance at commercial banks with the advent of the Deposit Protection Agency. After 2014, it will provide insurance to cover only Bt1 million per passbook per bank.

Lersuk expects the GSB's deposit base will expand to Bt1 trillion, because depositors will opt for stateowned banks, in which deposits are 100percent guaranteed by the government.