SMBC Bangkok goes for top spot

business June 07, 2019

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Sumitomo Mitsui Banking Corporation (SMBC), one of Japan's largest banks, aims to be the No 1 foreign wholesale bank in Thailand in terms of customer trust for the coming three years, according to Yuichi Nishimura, country head of Thailand.

Nishimura said SMBC also wants to be the best employer of choice in the Thai banking industry as it currently employs more than 500 staff at the Bangkok branch and a sub-branch in Laem Chabang, Chonburi.

In addition, SMBC's focus is also on corporate social responsibility (CSR) in Thailand where the bank has sponsored at five Thai universities annually.

SMBC's Bangkok branch was established in 1952, making it the oldest Japanese bank in Thailand, said Nishimura.

In Thailand, SMBC's business focus is on corporate finance, project finance, transaction banking as well as data analytic and marketing trends to provide comprehensive financial and related solutions to Japanese, Thai, and multinational customers.

The bank's customer base includes more than 3,000 Japanese-owned businesses here such as the biggest players in automotive like Toyota, Nissan, Honda, Mazda and others, as well as those in electronics, machinery, chemical, trading, consumer and other industries.

Thai-Japanese joint ventures and Thai conglomerates are also among major customers for corporate and project finance.

For example, SMBC was earlier appointed as the financial advisor for Long Son Petrochemicals (subsidiary of Siam Cement Group) which got a US$3.2 billion loan from six local and foreign banks, including SMBC, to implement its new petrochemical complex project in Vietnam.

Besides SCG, Nishimura, who is also regional head of Greater Mekong Sub-Region, said other Thai conglomerates such as PTT, Central, TCC, Minor, CP, Banpu groups and other several big group companies are among SMBC's major customers.

SMBC's strength lies in its international and regional network which consists of cross-border operations in the US, Europe, Asia and other regions.

As a result, its customers include the subsidiaries of multinational companies operating in Thailand and other Greater Mekong Sub-Region countries, namely, Cambodia, Myanmar, Laos and Vietnam.

In Myanmar, SMBC has two offices, while it operates two branches in Vietnam. SMBC also has an 18.25 percent equity stake in ACLEDA bank operating in both Cambodia and Laos.

SMBC's regional head office is located in Singapore.

In terms of assets and profits, Nishimura said, Singapore, Bangkok and Sydney are the top-three operations, with Thailand benefiting from its large export-oriented industries, tourism industry, and government-led infrastructure projects.

The Eastern Economic Corridor (EEC) programme, covering Rayong, Chonburi and Chachoengsao provinces, is another major driver of the Thai economic growth which will be supported by mega-infrastructure schemes such as the Bt200-billion-plus high-speed train system linking Suvarnabhumi, Don Muang, and U-Tapao airports.

Overall, Nishimura said, the economies of Thailand and other Southeast Asian countries were in the uptrend in 2018 but this year's outlook appears to be mixed due to a potential slowdown in the Chinese economy and the US-China trade conflict.

For example, Thailand's exports in the first quarter were negatively affected by external factors, but the country still has an advantage due to its strong supply chain for automotive, electronic and other manufacturing industries.

On digital technology, Nishimura said, SMBC earlier joined a total of 22 Thai banks and foreign-bank branches to build a full network of electronic Letter of Guarantee (e-LG) on blockchain with support of the Bank of Thailand (BOT).

The network is billed as the first of its kind in the world as participating banks have been working together to adopt the common blockchain system which is expected to significantly increase the use of blockchain-based e-LG by Thai businesses within the next three years.

Nishimura said the blockchain technology will make LGs easier, cheaper and faster for customers, helping to boost the competitiveness for both businesses and the country.

In Thailand, more than 500,000 LGs, worth over Bt1.3 trillion, are issued annually by public and private financial institutions.

In addition, SMBC also raised funds in the Thai capital market by issuing Thai baht bonds annually. Bond issues were worth Bt3.5 billion in fiscal 2016, Bt4 billion in fiscal 2017 and Bt2 billion in fiscal 2018.

Regarding SMBC's scholarship programme, more than 1,500 Thai students have benefited from this activity since 1962, helping them to realise their dreams and become leaders or specialists in their respective fields after graduation.

The bank's annual scholarships cover 30 selected undergraduate students nationwide who study at Chulalongkorn, Thammasat, Chiang Mai, Khon Kaen and Prince of Songkla universities.