The acquisition by the Bank of Tokyo-Mitsubishi UFJ (BTMU) of a stake in Bank of Ayudhya (BAY) is persuading Bangkok Bank (BBL) to prepare for stronger competition in the Japanese corporate banking business segment.
Chaiyarit Anuchitworawong, an executive vice-president of BBL, said the bank expects the deal to affect the local corporate loan market thanks to BTMU's expertise in the business sector.
But it also believes the move will offer greater opportunities to tap Japanese loans once Asean integration starts.
BBL, Thailand's largest bank by assets, expects to be the industry leader in financial services for Japanese businesses in Thailand.
It has two Japanese branches - in Tokyo and Osaka - which have been operating for 58 and 43 years, respectively.
BBL has also maintained a Japanese business unit for more than a decade with about 30 staff. It also has 20 Japanese partner banks.
"With our strong relationships with existing Japanese customers, we expect to maintain our client base despite the higher competition. Though the BTMU-BAY deal may lead to us losing a smaller piece of the corporate business cake, the cake will be bigger overall thanks to the country's positive economic outlook," he said.
BBL also plans to expand business regionally to cater to the Asean Economic Community slated to kick off in 2016.
This year will see a branch open in Medan on the Indonesian island of Sumatra, adding to its Surabaya branch on Java.
BBL is Thailand's strongest bank in the area of international banking, with 26 foreign networks in 13 countries and territories and an international loan portfolio making up 18% of total outstanding debts of 1.48 billion baht as of March 31.
Mr Chaiyarit said BBL is closely following Myanmar's banking regulations.
That country is expected to offer joint venture licences for foreign banks in the next two months, an upgrade from representative office licences now.
BBL has had a representative office in the neighbouring country for 18 years.
The bank is focusing on network expansion for international banking business rather than a partnership model.
If Myanmar's new rules do not suit the bank's strategy, it may not upgrade to become a joint venture bank, keeping its representative office.
The office finances customers investing in Myanmar from Thailand.