February 11, 2014 00:00 By Sucheera Pinijparakarn
Kasikornbank plans to fortify its AEC+3 (Asean plus China, Japan and South Korea) position after improving its strategic framework.
KBank has established a new world business division to specify where it wants to establish its footprint.
Pipit Aneaknithi, executive vice president and head of the new division, said KBank aimed to expand its AEC+3 network to five outlets this year, from only one in Chengdu, China.
The five new outlets will consist of two branches, one of them in China, and three representative offices, of which one will be Indonesia.
“The plan to open branches and representative offices will take time but in terms of branches, we are interested in Laos and Cambodia, and Myanmar if it grants a branch licence for foreign banks,” he said.
KBank already has a representative office in Myanmar. He said the bank would set up branches and representative offices in neighbouring countries while also keeping the partnership model outside Asean, except China.
Thailand’s fourth-largest bank by asset has no branches in Asean because under its former model, it supported Thai customers through local partner banks. KBank currently has 35 partner banks in Japan, South Korea, Singapore, Laos, Indonesia, Vietnam, Cambodia, the United States and the European Union.
Pipit said it would tighten its relationship with partner banks to offer business matching and either individual or syndicated lending.
KBank has set out a clear strategy on which customer segments it will chase. These consist of international including border trade, foreign players in Thailand who plan to invest in the Asean Economic Community, Thai investors penetrating the AEC market, foreign tourists, and local customers in countries where KBank branches are established.
He said that even though the political unrest in Thailand was discouraging investment from China and Japan currently, Thailand in the long term would continue to attract investors who want to cash in on the inflows of funds and trade ahead of the AEC.
Japanese investors have expressed increasing concern about ongoing political instability in Thailand, but Pipit pointed out that many of them had also announced intentions to move to other countries after the flood disaster in late 2011 but in the end stayed here.
KBank targets total trade transactions in AEC+3 this year of Bt910 billion, up by 28 per cent from Bt770 billion last year. Outstanding loans for investment in AEC+3 this year are projected at Bt39 billion, up 48 per cent from Bt26 billion. In China alone, outstanding loans are expected to grow from Bt13 billion to Bt20 billion.