Kasikornbank (KBank) says the competitiveness of big Thai companies needs improvement, as only two-thirds of large local firms can expect to handle stronger competition in the Asean market.
Vasin: Integration presents challenges
Problem areas include management and research and development.
Executive vice-president Vasin Vanichvoranun said a study of the financial index of large Thai business operators found that big firms showed strong potential over the past three years.
The study said 70% of businesses booked annual sales growth of 10-20% over the period, 53% showed a gross profit margin exceeding 20%, and 65% recorded a debt-to-equity ratio of 2.
But Mr Vasin said local businesses have to adjust their operations in preparation for higher risk.
The rise in the daily minimum wage to 300 baht, urbanisation and greater competition with the advent of the Asean Economic Community (AEC) in 2016 all present key challenges for Thai businesses.
"Let's say the country's real GDP [gross deposit product] growth is 8%, of which 5% is GDP and 3% is inflation rate," Mr Vasin said. "Local large corporate businesses should book annual sales growth of at least 8-10% in the next year.
"If their annual sales growth is lower than that level, they need to improve their business potential."
With the changing environment, KBank is supporting corporate customers both locally and regionally in four service areas: advisory, cash management solutions, fund-raising and risk protection.
For the 2013 corporate banking business plan, KBank expects to complete seven initial public offering (IPO) deals, nine capital market deals worth 25 billion baht and 110 fund-raising deals worth 400 billion baht.
With deals in the pipeline, the bank expects 2013 corporate loan growth of 4-5%, raising the total loan portfolio to between 395 billion and 411 billion baht by the end of the year.
In 2013, its fee-based income will rise 17%, with fee income rising to 2.9% from 2.6% of total assets in 2012.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter