Deutsche Bank focusing on Thai corporations
Deutsche Bank says Thailand is one of its fastest-growing markets in Asean and it's looking to invest in new services to attract more domestic clientele.
The bank has recorded double-digit growth this year and saw its bottom line grow 50% year-on-year.
Pimolpa Suntichok, Deutsche Bank's newly appointed chief country officer for Thailand, said the bank's strategy is to find new clientele among large Thai corporations looking to expand and invest overseas.
Some 70% of Deutsche Bank's clients in Thailand are foreign multinationals, so the bank is looking at domestic corporations to grow within Thailand.
"Increasingly we are seeing more European clients looking to set up supply chains in Thailand, particularly in the automotive industry, and trade finance is benefiting from this," Mrs Pimolpa said. "We are also seeing Thai clients with offshore operations wanting more local day-to-day support to improve the efficiency of working capital."
Some of Deutsche's clients in Europe are also interested in government development projects in the Eastern Economic Corridor and are looking to invest in high-speed rail projects along with accompanying parts and services.
For Thai corporations, Deutsche Bank is looking to help facilitate cross-border trade with multi-currency support.
"If you look at the top 10 conglomerates here, they are very large and going outside to expand revenue bases, get more recurring revenue and increase diversity in revenue bases," Mrs Pimolpa said. "Our strategy is to expand more among local corporations, as Thai corporates are strong and are acquiring businesses outside of Thailand."
She said this activity is driving demand for Deutsche Banks's multi-currency support unit.
As for the overall economic outlook of the region, Chandra Mallika, chief operating officer for Asia-Pacific at Deutsche Bank, said signs of a slowdown are apparent but not catastrophic.
"We don't see big corporates cancelling projects, but we do see more are cautious about investing in new things," she said. "Some inventory is coming down in manufacturing, GDP rates are going down and the trade war is raising concerns with no amicable solution in sight."
But Ms Mallika affirmed the importance of Asia-Pacific as a region for the bank, which operates in 14 countries here, saying it remains critical to the company's growth strategy.
Asia-Pacific contributes 12% of the bank's global revenue, and the figure will rise to 14% by 2022.
Ms Mallika said the US-China trade war has not affected business and revenue much, and can even benefit European banks as supply chains are disrupted and some clients talk of moving to Vietnam or Thailand.
She said a major trend in banking is "disintermediation", or the reduction of intermediaries between producers and consumers.
"The biggest risk for banks is disintermediation, especially in payments, as new fintech companies disintermediate the whole sector," Ms Mallika said. "The government must find ways to regulate these new companies and services."
Deutsche Bank was recently fined $16 million by the US Securities and Exchange Commission for violating American corruption laws in hiring relatives of foreign government officials in China and Russia to win or retain business.