Despite the risk of doing business domestically, Siam Commercial Bank will continue to focus on expanding locally, as running banks overseas requires a lot of time to build infrastructure.
SCB executive chairman Vichit Suraphongchai said having more franchises overseas was not easy because the bank had to build infrastructure, whereas in the local market, it can open more branches easily.
Even though the bank has witnessed slower loan growth so far this year, it cannot quickly adjust its focus towards overseas lending, he said.
SCB this year targets loan growth of 5-6 per cent, down from 12.1 per cent last year.
The demand for loans by the private sector has slowed because the economic picture in Thailand is uncertain, with some industrial estates telling the bank that foreign companies had suspended their plans to buy land plots, Vichit said.
Kannikar Chalitaporn, president of SCB, said the bank had placed some importance on the Greater Mekong Subregion, where business activities are growing ahead of the Asean Economic Community.
In the GMS, SCB owns a branch in Laos and a representative office in Myanmar. It has an affiliated bank in Cambodia under the name of Cambodian Commercial Bank and an interest in Vinasiam Joint Venture Bank.
Vichit earlier said SCB planned to restructure its status in Vietnam and Cambodia to make its footprint clearer in the region.
"Once the foreign-investment regulations in Vietnam are clear, SCB is ready to put more capital into the joint venture, or if they ask us to buy a full stake, we are [ready to do that] as well," he said.
In the long term, Vietnam is a high-potential market, as several banks that have a presence there know well that they should get to hasty there until the government stabilises its policies.
As for Cambodia, Vichit noted that its economy was smaller than Vietnam’s and the country did not have much in the way of industries attractive to foreign concerns.
"Our growth opportunity in Cambodia may be slower than in Vietnam," he said.