MEDAN, INDONESIA : Bangkok Bank (BBL) expanded its business abroad by opening a branch in Medan, its 26th overseas branch and third in Indonesia.
The bank sees high potential in the Asean region.
With Indonesia's GDP growing by 6% on average in recent years, branches there have had higher growth in profitability than its other foreign branches, said president Chartsiri Sophonpanich.
Medan is the capital of North Sumatra and the third-largest city in Indonesia.
Thailand's largest bank by asset size entered the Asean market 45 years ago by opening a Jakarta branch in 1968. Its second Indonesian branch was opened in Surabaya last year.
BBL expects outstanding loans at its Jakarta and Surabaya branches to reach 1 billion baht this year, up 33% from 750 million baht last year. In 2011, the branches' loan portfolio stood at 500 million baht.
Indonesia's infrastructure development still lags behind that of Thailand. But with a population of 240 million and rich natural resources, it has great potential to expand as one of the most popular destinations for foreign direct investment from around the world.
"There are also plenty of opportunities for Thai businesses to expand there," said Mr Chartsiri.
He said medium-sized companies have many opportunities in Indonesia as they can follow large firms that have been investing there for several years.
Currently, 15% of the Indonesian branches' customers are Thais involved in agriculture, energy, petrochemicals, auto parts and textiles, while 85% are Indonesians and people from elsewhere in Asia.
Like Thailand, Indonesia was recently hit by sudden foreign capital outflows and foreign exchange fluctuations, but the situation has returned to normal.
Similarly, Asean's largest economy has steadily improved economic fundamentals and its financial system after the lessons of the 1997 financial crisis.
BBL's overseas loan portfolio represents 15-18% of its outstanding debt at 1.7 trillion baht.