SCBT upbeat after retail banking exit
Standard Chartered Bank (Thai) (SCBT) is aiming for a high single-digit top line growth under its five-year plan after its exit from retail banking to focus on wholesale banking.
Under the bank's five-year plan until 2021, SCBT expects its annual revenue growth will be twice the growth of the country's economy, said chief executive Plakorn Wanglee, SCBT's first Thai chief. The bank forecasts the economy will expand in a range of 3-3.5% annually, which is still below the country's growth potential. The bank expects revenue growth for this year of around 7%.
SCBT focuses on three customer segments -- local large and mid-scale companies, financial institutions including government institutions, insurance, and asset management companies and multinational companies. It has paid attention to both inbound and outbound investment.
Mr Plakorn said the bank has expertise in several areas of the wholesale banking business, particularly transactional banking, securities, and financial market services. An international network with 1,100 branches in 68 countries in Asia, Africa, and Middle East supports the bank's business operations. UK-based Standard Chartered Bank, a parent of SCBT, is present in all 10 Asean countries.
Mr Plakorn, who also oversees the bank's representative offices in Cambodia, Laos and Myanmar, said there are great business opportunities for both local and international corporate customers to expand their foothold in these high-growth countries.
Apart from Asean, the bank has business exposure in other high-growth emerging markets, especially China, India, and Bangladesh. International businesses represent a significant portion of SCBT's total assets at 201.7 billion baht.
SCBT has not set a target for loan or asset growth, but rather is focusing on offering value-added services to clients and its profitability. The bank managed to turn the corner with a net profit of 384 million baht last year after a net loss in the previous year.
Moreover, last year the bank reduced its liabilities and operating costs by 10% and 17%, respectively. The bank has continued to control non-performing loans (NPLs), with the NPL ratio now down to 4.91% from 5.63% at the end of 2016, thanks to strong risk management. Its bad debt ratio peaked at 6.11% in 2015.
"Despite a recent divestment of its retail banking business, Standard Chartered Bank is committed to long-term investment in Thailand, building on our presence in the Thai market for the past 123 years. We plan to further invest in Thailand and partly support the country's economic expansion," Mr Plakorn said.
Late last year, Tisco Bank and its sister firm All-Ways Co announced the acquisition of SCBT's retail banking business for 5.5 billion baht. Under the deal, Tisco Bank acquired SCBT's credit cards, personal loans, business loans, wealth management unit, mortgage loans, bancassurance and retail deposits.
Some 7 billion baht in personal loans, 5 billion baht in business loans, 25 billion baht in mortgages, six branches of SCBT, 300,000 retail customers and another 100,000 affluent clients will be transferred to Tisco Bank, while 4 billion baht worth of credit-card business will be shifted to Tisco. The transition is expected to be complete by the end of this year.
SCBT plans to improve its infrastructure system in line with digital banking trends with an historically high investment budget of around 1 billion over the next five years until 2021. "For Thailand, we've decided to focus only on our competitive area, the corporate banking business. With high competition, and the massive resource and investment requirements of the retail banking business, we've decided to sell it off," he said.
Mr Plakorn, 51, was appointed SCBT's top executive in September 2016. He has been with the bank for five years and was head of international corporate prior to the appointment. His family was a major shareholder of Nakornthon Bank, which was renamed Standard Chartered Nakornthon Bank after the UK bank Standard Chartered acquired a 75% stake in 1999.