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KBank eyes more fee income from border trade

WITH THE economy struggling to grow, Kasikornbank is taking a closer look at transactional banking, especially upcountry, including border provinces.

The unexpected boom in financial activities in border provinces from people in neighbouring countries last year is a contributor to fee income, KBank president Teeranun Srihong said yesterday.

The bank will add human resources, automated teller machines and branches in border provinces this year to deal with the growing volume, as it expects fee income will help shore up profitability despite the economic gloom.

KBank's profit this year is expected to expand by 10 per cent.

Bancassurance will still be the key driver of fee income this year as insurance penetration is still low.

Predee Daochai, a co-president, said the bank hoped fee income this year would increase by 10-15 per cent as it wanted to maintain the mix of non-interest and interest income at 40:60.

Teeranun said the economy was facing risks plus the political instability, which would slash both private and public investment. The global economic recovery will likely be the only hope for expansion of Thai gross domestic product and lending.

The bank believes the export sector will return to the growth path. Exports with local content will benefit a lot because of the downtrend of the baht.

Based on growth forecasts for exports at 5-7 per cent and GDP at 3.6-3.7 per cent, KBank projects its loans to rise by 9 per cent this year.

China will be among the key economic markets to bounce back this year. Last year, KBank opened its second branch in that country, in Chengdu.

"We are in talks with the authority over there to open the third branch," Teeranun said. "China is still the focus of KBank."

Last year, KBank limited its lending in China to 2.2 billion yuan (Bt12 billion), down from the target of 2.8 billion yuan, because of the economic slowdown there.

Pipit Aneaknithi, head of Chinese business, said the bank would provide more details about its strategy for that country next month.

Teeranun said the bank would work closely with its 24 Japanese bank partners to protect its Japanese customer base after Japan's Mitsubishi UFJ Financial Group entered the market here through the takeover of Thailand's fifth-largest lender, Bank of Ayudhya.

In the long term, Japanese customers are important foreign investors here.

Working with local banks to understand the market and helping customers help each other make up the partnership model for KBank to become an Asian bank.

KBank plans to re-enter Laos and Cambodia, Teeranun said.


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