March 25, 2014 00:00 By Sucheera Pinijparakarn
More managers needed to match peers in relationship with all corporate clients
Krungthai Bank is building up human resources and recruiting more managers for wholesale banking after finding that its ratio of relationship managers to corporate accounts is lower than its peers.
Of the 1,700 business groups in KTB’s wholesale banking customer base, only 20 per cent are active because the bank doesn’t have enough relationship managers to cover all kinds of corporate customers, Kittiphun Anutrasoti, senior executive vice president and head of wholesale banking, said yesterday.
KTB probably has to allow those customers to use other banks instead, he said.
The wholesale banking group has 200 staff. It will recruit 20 more from the outside this year, but it also has to grow its own officers because it is difficult to find wholesale banking talent.
Even though major banks have shifted to investment banking, KTB still aims to increase its corporate loans because its major income will continue to be interest income.
“Investment banking generates little income for the bank because fee income depends on the number of deals and the trend of investment banking in the next 12-18 months is unclear because of the economic gloom.
“Interest accounts for 60 per cent of the income of wholesale banking in many major banks.
"In KTB’s view, investment banking deals cover mergers and acquisitions and fund-raising through the equity market, while other banks might include treasury and bond markets,” he said.
KTB sees more opportunity to grow in corporate lending because it still has 800-900 accounts that are not actively captured.
KTB’s wholesale banking portfolio runs around Bt600 billion.
The bank will also increase its role as a lender in the CLMV (Cambodia, Laos, Myanmar and Vietnam) market. In Laos alone, KTB is the largest lender among Thai banks.
KTB is the lead arranger for a US$700 million syndicated loan to the 410-megawatt hydropower plant operated by Xe-Pian Xe-Namnoy Power Co (PNPC). It has also committed to 43 per cent of the facility.
PNPC is controlled by four multinational power companies – SK Engineering and Construction, Korea Western Power, Ratchaburi Electricity Generating Holding and the government of Laos via Lao Holding State Enterprise.
KTB will be active in Laos as the lead arranger of syndicated loans because Laos, which is the “battery of Asia”, has power plant projects that require debt financing.
The bank was recently appointed as the financial adviser to Thai companies setting up plants in Myanmar. Those companies are demanding loans to support their businesses over there.
Corporate customers overseas account for 6 per cent of KTB’s wholesale banking portfolio.
Due to the economic and political uncertainty, net loans this year will not expand like before. KTB will focus on helping corporate customers in terms of cash and risk management.
Weidt Nuchjalearn, first senior executive vice president and head of retail banking and small busi-ness, said small businesses should focus on cutting operating costs and seeking partnerships to get through the political deadlock.
Small businesses should have a business continuity plan in place, just like major companies and banks do, to defend against risks.
However, the bank believes some small businesses will close down especially those in the service industry in Bangkok.
About Bt1billion-Bt2 billion of total outstanding small business loans of Bt100 billion are regarded as in serious condition and need to be monitored.
The bank will offer more flexible assistance to help small businesses in the second half as its effort to keep non-performing loans down at 2 per cent this year.
NPLs of retail and small businesses have climbed to 2.6 per cent from 2.3 per cent so far this year, he added.