Krungthai Bank (KTB) plans to accelerate its branch downsizing and consolidation schedule for 80-100 sites this year, aiming to maintain half of existing staff by having them work from home to adapt to post-pandemic behaviour.
The coronavirus spread accelerated the shift to digital banking, with 70-80% growth in transactions made through KTB's mobile banking app Krungthai Next during the pandemic. The shift convinced the bank to speed up plans for branch consolidation, said president Payong Srivanich.
The bank also aims for 12 million Krungthai Next users by year-end, up from 10 million.
The physical branch downsizing plan includes relocation, consolidation and closure. The bank has no plans to trim headcount and aims to reskill workers, though the number of staff will decline from natural turnover, Mr Payong said.
Apart from branch downsizing, KTB plans to remodel its physical branches based on location and customer segments to keep pace with demand, he said.
KTB, the country's third-largest lender by assets, saw branch numbers fall to 1,113 nationwide at the end of March from 1,162 at the end of last year, according to Bank of Thailand data.
Mr Payong said the bank will pay more attention to increasing staff productivity and lowering the cost-to-serve ratio against the backdrop of steady margins.
The bank plans to let half its staff continue working from home after the government eased lockdown measures after finding that employees' productivity in dealing with the government's 5,000-baht cash handout scheme improved. Some 75% of staff worked from home during the lockdown period.
KTB, which has the Financial Institutions Development Fund as its largest shareholder, is expected to further serve government policy and economic recovery measures.
Digital banking is a key channel to support the government's electronic payment scheme.
KTB wants to increase the capacity of Krungthai Next, which is handling disbursement of the 5,000-baht cash relief to as many as 20 million recipients.
"We plan to release new features and services for Krungthai Next in the third and fourth quarters this year," Mr Payong said. "Wellness and healthcare are the key categories to support the government's policy amid the pandemic."
The digital platform is the bank's new income source because banking has been disrupted, he said. Interest income, representing 70% of the bank's total revenue, will further decline as the central bank keeps interest rates at rock-bottom levels to prop up the fragile economy.
The bank expects loans and income to increase in the second quarter, while the economic contraction will deepen, Mr Payong said.
Government and corporate lending continue to support loan expansion in the second quarter, he said, while loan demand from corporations has gained to replace bond issuance.
KTB shares closed Friday on the Stock Exchange of Thailand at 11.20 baht, down 30 satang, in trade worth 470 million baht.