BAY keen to target Japanese
Bank of Ayudhya (BAY) will take advantage of having a Japanese parent bank to capitalise on the stream of direct investment from Japan into Thailand and help the local bank expand its loan portfolio.
Pornsanong Tuchinda, head of commercial banking, said the bank aims to expand its loans outstanding to the Japanese in a sustainable way, but did not specify the exact target for such growth.
BAY's international corporate loan portfolio amounted to 169 billion baht as of September, accounting for 29.3% of total corporate loans outstanding at 573 billion baht.
The loan proportion is expected to increase because of strong opportunities in the business segment, he said.
Thailand's fifth-largest bank by assets saw Japanese and international loans outstanding for the first nine months this year drop slightly by 0.8% from the end of last year.
The loan contraction could be attributed to a slowdown in global trade as the business relies largely on global trends, said Mr Pornsanong. Weak global trade has taken a toll on Japan's vehicle industry, in particular.
Japan-based Bank of Tokyo Mitsubishi UFJ (BTMU), which owns 76.88% of BAY's shares, has helped contribute Japanese business to BAY. As a result, the Thai bank could grow the business segment significantly after an integration with the BTMU Bangkok branch was completed in 2015.
Japanese foreign direct investment in Thailand remains positive as they still use the country as a production base to expand their corporate foothold into Asean, particularly Cambodia, Laos, Vietnam and Myanmar, he said.
Thailand's location makes it a hub of frontier markets in the region, so it remains a desirable investment destination for the Japanese, said Mr Pornsanong.
Despite the fall in Japanese and international corporate loan portfolio, BAY delivered a 7.7% increase in total loans from the end of last year to 1.4 trillion baht at the end of September. BAY's loans grew at a higher clip than its four larger peers, which experienced either marginal growth or decline.
Given the 8.1% growth in its Thai corporate loans from the end of last year to 405 billion baht at the end of September, the bank's total corporate loans outstanding increased by 5.3% to 573 billion baht.
"With a diversified loan portfolio, our loans grew satisfactorily during the first nine months this year, with a positive trend for the remainder of this year amid improving economic momentum," he said.
The bank's business restructuring to comply with BTMU's business direction also lent support to loan growth, said Mr Pornsanong.
BAY aims to be a top-tier bank in Thailand by 2017 as part of a three-year business plan starting from 2015, but it plans to expand conservatively for sustainable growth, he said.
BAY shares closed Friday on the SET at 38 baht, unchanged, in trade worth 21.9 million baht.