Siam Commercial Bank (SCB) is aiming to provide 25% of loans for Thai businesses investing in Vietnam by 2018, along with a 10% share of Vietnam-Thai trade volume by 2020.
SCB's Ho Chi Minh City branch, which officially launched this week, will mainly serve both Thai and Vietnamese corporate customers in the spheres of trade and investment, said chairman of the executive committee Vichit Surapongchai. He added that there are several Thai conglomerates with a foothold in Vietnam, including CP Group, Siam Cement Group (SCG), TCC Group, Central Group, Amata, and Red Bull.
Former prime minister Anand Panyarachun, who is now the chairman of SCB's board, also attended the opening ceremony.
"We want to serve our wholesale customers first before entering into the retail banking business as the next step. In light of digital trends, it will open up more opportunities for the bank in the long run," he said.
SCB, Thailand's third largest bank by assets, made a soft launch for its Ho Chi Minh City branch on March 21 after receiving a foreign banking licence from Vietnamese authorities last year. The bank had previously operated in the country through a joint-venture with Vinasiam Bank for 22 years.
Mr Vichit said SCB was ready to expand its business in Vietnam, a country of 95 million, thanks to its solid economic growth and a flood of Thai investors expanding their businesses there.
According to the Vietnam Statistics Office, the country's economy in 2015 grew 6.67%, the fastest clip in five years and higher than the government's projection of 6.2%. The healthy growth was mainly supported by strong exports, foreign direct investment (FDI), and domestic consumption.
Thailand's FDI in Vietnam increased to US$14.5 billion last year from $12.5 billion in the previous year. Vietnam also ranks number nine among Thailand's trade partners worldwide in terms of trade volume.
Meanwhile, the general director of SCB Ho Chi Minh City, Saraya Skontanarak, said the bank was in the process of increasing its registered capital from $25 million to $70 million. The recapitalisation is expected to be completed this month. With more capital, it hopes to support aggressive business expansion in line with Vietnam's economic growth.
The existing loan portfolio, which was transferred from Vinasiam Bank, amounts to $50 million, of which $20 million or 40% is from non-performing loans (NPLs). Bad debt management and new loan growth will gradually bring down the bank's NPL ratio, she said.