Siam Commercial Bank plans to establish its financial services network in Asia within three years, according to executive board chairman Vichit Suraphongchai.
Vichit: Focus on East Asia and Indochina
"In the next three years, the bank is gearing up towards the establishment of SCB networks in two key areas of Asia: the first one is the route connecting Asean and Indochina, while the second one links Asean with East Asia," Dr Vichit said at an inauguration of the first SCB branch in Yangon, Myanmar.
The official opening of the Myanmar branch is a key step in creating SCB's "footprint" as a regional bank.
"The footprint for SCB means when we go anywhere [in Asia], everyone knows who we are whether they are our clients or not," said Dr Vichit.
Under its three-year regional expansion plan, SCB will focus on East Asia and Indochina while excluding South Asia as it is still short of human capital to work in that region.
China is the main focus. It is significant to Thailand and Southeast Asia in terms of logistics and economic activities, while its currency is playing a major global role. The yuan is expected to become a reserve currency as the US dollar and euro weaken.
The situation is a repetition of what happened 35 years ago when the US dollar was depreciating. The yen became the world's reserve currency as Japan's economy was quite strong. Once the yen became a reserve currency, Japanese investors acquired assets of Western countries to balance its currency.
Chinese investors need to invest overseas, with opportunities in the US oil business or mining in Australia, but they may prefer to invest in Asia.
"I believe that China's strategy is to keep Asean as its good friend, especially Thailand, which is geographically a central location of the region. So now it depends on the Thai government's policy to tap into opportunities from China's policy," said Dr Vichit.
He also highlighted the Dawei megaproject in Myanmar, saying the key to success would be not only strong financial support but also good management.
SCB is the financial adviser to Italian-Thai Development, which has held the Dawei project concession since 1997, even though the bank has had no chance to lend money yet.
Dr Vichit said problems remained with resettling the 20,000 people living near the site of the project.
He also said labour costs were not expected to be as cheap as thought.
"From the information we have, unskilled labour will cost 180 baht per day and skilled workers will cost more than 300 baht. That is no longer cheap," said Dr Vichit.
However, SCB still believes the project will be of great benefit to Thailand as a whole, but the private sector cannot act alone and needs government back-up in negotiations, he said.