The Industrial and Commercial Bank of China (Thai) jumped into the retail banking fray to improve its profitability amid narrowing corporate finance margins.
While its Thai branch is small, it is a subsidiary of the world's largest bank by market capitalisation and the third-largest by assets.
ICBC (Thai) wants to increase revenue contributions from its retail business to 40-50% of its total income over the next three years from 10-15% now.
The bank's retail business assets stand at 45 billion baht, largely derived from auto loans, compared with the bank's total assets of 128.67 billion baht, said chairman Ye Hu.
Auto loans operated by its subsidiary, ICBC (Thai) Leasing Ltd, were helped by the government's first-time car buyer scheme. In provincial markets, the pickup truck segment especially generates higher yields. Eleven of ICBC (Thai)'s 19 branches are in the provinces.
Aircraft leasing will be another area of focus for the local leasing firm, with strong expertise and support from ICBC Leasing.
Several retail financial products and services will be introduced at the 2013 Money Expo from May 9-12, with several privileges such as credit cards. The bank's soft launch of a credit card late last year was by invitation only. It also plans to launch personal loans next year.
Branch business, comprising local corporate and small and medium-sized enterprise (SME) loans, account for assets of 15 billion baht.
Corporate and Chinese banking business constitute 25 billion baht and 32 billion baht worth of assets, respectively.
Mr Hu said the parent ICBC wants to expand its business in Thailand through ICBC (Thai) by offering services to cover all the business segments because of the country's strong economic growth and sound fundamentals.
These positive factors have attracted Chinese companies to continue to invest in Thailand.
"We want to grow our business organically in Thailand, but also open up opportunities for asset acquisitions," he added.
The firm projects total assets to reach 150-160 billion baht this year, rising 20-25% from last year.
The bank booked loan growth of around 10% in the first quarter from outstanding loans of 104 billion baht at the end of 2012.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter