CIMB Thai Bank is solidifying its operations in Thailand with particular focus on cost of funds and interest as well as non-interest income, while gearing up to become a Southeast Asian universal bank by 2013.
CEO Subhak Siwaraksa said yesterday that 2010 would be the year of consolidation for expansion in the future.
Besides its major focus, the bank will also enhance infrastructure like risk management systems, IT development and cooperation with other corporate units in the group to strengthen the operations of Malaysia-based CIMB Holding in Thailand.
Loan and deposit growth this year is targeted at 10-15 per cent, while fee-based income growth is targeted at 35-40 per cent.
CIMBT would further exploit CIMB's network in growing the bank, like the expansion of the customer base to new markets as well as the strengthening of the bank's image.
To support future growth, this year the bank will rely more on savings and current account deposits, which should rise to 30 per cent of total deposits from 25 per cent at end-2009 and 15-16 per cent in early 2009.
To boost interest income, the bank will penetrate the mortgage market, as its retail base can be extended from car loans and unsecured loans.
SMEs are also in the bank's sights, particularly those with funding needs of Bt20 million or lower.
New products are being designed to capture larger companies, with attention placed on energy-saving schemes.
More products like structured notes, bancassurance and cross-products will be offered to beef up fee-based income, while project financing will be strengthened, particularly for the government's infrastructure projects and export-oriented companies.
The bank also plans to play a key role in advising on Sukuk bonds.
"I believe that if this strategy works, we'll be financially strong and ready to offer an integrated service in Southeast Asia, in line with the parent CIMB Group's aim. Then, we will be one of the top three with the best return on equity in 2013 with a high performance culture," Subhak said.
As CIMB Group's ROE is 14-15 per cent, CIMBT's will be 16-17 per cent in three years. The average ROE for Thai banks is 7-10 per cent.
After three years of losses, CIMBT swung back into the black last year with a net profit of Bt1.6 million. Though the loan portfolio will be built up, non-performing loans are set to fall below 5 per cent of outstanding loans from 6 per cent last year.
The bank's net interest margin is expected to stand at 3.5-3.9 per cent, above last year's 2.7 per cent.
CIMB Group, following the takeover of BankThai, is now heading to be the first foreign firm seeking a dual listing in Thailand.
CEO Nazir Razak insisted here that share trading should start around June. The group will submit its listing application to the Securities and Exchange Commission after the release of first-quarter financial statements.
Subhak said that in one or two months, the group would name the financial adviser for the listing.
The political situation in Thailand should not affect the listing plan, he added.
