Making a difference

Making a difference

TMB Bank CEO engineered a turnaround after decades in the red by revoking traditional conditions on financial products.

The former Thai Military Bank struggled under a mountain of loan defaults, bad debt and operating losses for decades. But nowadays, as TMB Bank, it has proven achievements by growing in different ways under the leadership of chief executive Boontuck Wungcharoen.

Once innovative deposit products become more popular, the traditional products may even disappear, says Mr Boontuck. PORNPROM SATRABHAYA

Last year, TMB returned a record-high operating profit before provisions of 10.5 billion baht.

Its non-performing loans were at 4.1% of its loan portfolio under consolidated accounting and 3.75% under the bank's accounting _ the lowest rate in its history.

"The new page in the history of TMB is because of our different strategy," said Mr Boontuck in an exclusive interview with the Bangkok Post.

Mr Boontuck was appointed as the top executive on July 14, 2008 under a management restructuring after the ING Group and the Finance Ministry became major shareholders in the bank.

The bank implemented the "TMB Way" as its first strategy under the new regime.

Organisational integration, particularly in staff unity, was the key objective in the first step towards internal adjustment, said Mr Boontuck.

Then it launched a "Make the Difference" strategy to create added value for TMB and all stakeholders _ shareholders, employees and clients alike.

A customer-focused approach was apparent as TMB launched innovative financial products by revoking traditional conditions.

TMB does not place obstacles on deposit accounts regarding the length of deposit, amount and transaction fees, while it has also improved interest rates.

It has also introduced an electronic banking channel called Me by TMB and a One Bank One Account deposit to strengthen its deposit base.

"Local depositors have had no choice under the traditional accounts for 50 or 60 years. But once such innovative deposit products become more popular, the traditional products may even disappear," said Mr Boontuck.

He said TMB's deposit-led strategy without conditions is a first in the Thai market, as it wants to make a difference.

The local banking industry in general has used an asset-led strategy to expand business for a long time.

TMB needs a strong deposit base with reasonable prices in order to expand business sustainably.

This allows it to increase product cross-selling and reduce its cost-to-revenue ratio.

Its cost-to-deposit ratio has been reduced to 1.67% compared with 1.69% for the industry, reflecting its greater efficiency.

TMB has attracted 300,000 new retail customers, 6,000 small and medium-sized enterprises and 600 wholesale businesses since launching its "Make the Difference" campaign.

Outstanding deposits totalled 496 billion baht at the end of last year, up by 9.7% from 2011.

Even though TMB's market share of deposits remains at a marginal level of 6-7%, consumers have become familiar with the bank's products and the stronger TMB brand.

"The bank's blind market survey for a new innovative financial product, which did not show any clues such as the brand, colour or presenter, found many testers could imagine it was a TMB product," said Mr Boontuck.

This year, TMB will implement another strategy, "Experience", under the "Make the Difference" concept.

All staff in all divisions, both front and back office, have been tasked with improving service quality and giving customers a new experience.

"We think all staff from all departments can help to improve service quality _ even human resources and accounting units, not only branches or the front office. The concept is the same as the successful 'TMB Way' strategy, with unity as the key," Mr Boontuck said.

Under a checking system throughout the operational process, TMB can find the cause of a problem or a weak link if a customer is dissatisfied with products or services.

The bank plans to check customers' satisfaction quarterly.

"We have been behind the big players for many years but we don't need to follow them _ we want to create our own new way," said Mr Boontuck.

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