KBank sees brighter days ahead for corporate deals

KBank sees brighter days ahead for corporate deals

Global, local upturn to drive finance demand

Kasikornbank (KBank) predicts strong demand for private-sector financing over the next 12-18 months, driven by better economic circumstances locally and globally.

Executive vice-president Vasin Vanichvoranun said during the period, KBank expects companies to invest a combined 1 trillion baht as the outlook brightens.

The US economy is projected to grow by 2.4% next year, up from a forecast 1.9% this year.

The euro zone is apt to expand by 0.8% after shrinking by 0.8% this year, while China is seen growing by 7.5%.

Thai economic growth is estimated at 4.5% in 2014, up from 4% this year, a gain that could spur private investment and a new round of fund-raising by local firms.

Corporate loan growth of local banks is reckoned at 8% next year after a 7.5% rise this year.

Demand for fund mobilisation from the capital market will also strengthen amid plentiful liquidity and an upward interest rate cycle in 2014.

KBank itself has signed several investment banking deals with corporate customers with a collective value of 150-200 billion baht over the next 12-18 months.

As a financial adviser and underwriter, KBank is set to offer two infrastructure funds worth a combined 10 billion baht within the next two months.

Panop Ansusinha, the head of investment banking, said it will also launch structured bonds backed by an issuer's existing loans and valued at 8 billion baht for an alternative energy firm next month.

"The second half of this year into next year is suitable for fund-raising from the capital and bond markets due to surplus liquidity," he said.

"Locking in cheap rates before an interest-rate hike is another major reason."

KBank, the country's fourth-biggest bank by assets, has other investment banking deals in the pipeline including initial public offerings, property funds and real estate investment trusts.

The goal is to achieve fee-based revenue growth of 16% for the corporate banking business this year after recording 10-12% in the first half.

Shares of KBANK closed yesterday on the Stock Exchange of Thailand at 187.50 baht, down 50 satang, in heavy trade worth 1.75 billion baht.

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