GSB mulls asset management section to expand services

The Government Savings Bank is looking into setting up its own asset management arm or investing in an existing company to expand its financial services to clients.

Chairwoman Pannee Sathavarodom said the GSB would look to hold 49% in either a new venture or an existing asset management company, if it is structured as an investment unit, to allow the state bank a role in setting strategy.

"We also want to be able to send GSB staff to the venture to learn about the asset management business and personal investment strategy," she said.

The GSB would also transfer its existing provident fund, now managed by MFC Asset Management and Thanachart Fund Management, to its new partner or associated company.

The GSB already holds a 24.5% stake in MFC, which also counts the Country Group and the Finance Ministry as major shareholders.

Its provident fund was established seven years ago to replace an earlier pension programme.

One incentive given to staff so they would forgo the pension scheme in favour of the provident fund system was a pledge by the bank to contribute 16 billion baht to it within 10 years of its formation.

Participating GSB staff members contribute 9% of their salaries to the fund, with the bank providing matching contributions.

Mrs Pannee said GSB will also reach out to Thailand Post, the government postal service, to develop commercial applications and customer channels.

She said under the collaboration, Thailand Post would act as a deposit channel for customers to access GSB accounts.

The programme will begin next year.

In the future, post offices could be used to market and sell credit products for the GSB, said Mrs Pannee, adding that next year the bank will broaden its marketing activities to other state enterprises such as the TV broadcaster MCOT.

The government policy of upgrading existing Village Funds into community banks also represents a new business opportunity for the GSB to broaden its credit and deposit base. To date, 36,000 Village Funds out of more than 80,000 nationwide have upgraded to community banks, with technical support and training provided by the GSB.

About the author

Writer: Wichit Chantanusornsiri
Position: Business Reporter