Local banks keen on Asian expansion

Local banks keen on Asian expansion

Positioning themselves ahead of advent of AEC

Large Thai banks are eager to expand their presence in Asia to tap business opportunities from the region's burgeoning economy and the advent of the Asean Economic Community.

Kasikornbank (KBank) will open a second Chinese branch in Chengdu next month, with a third planned in the next 3-5 years.

Chief executive Banthoon Lamsam said the expansion is aimed at building a track record so it can apply for a local banking licence from the Chinese government.

"Once we achieve the goal of opening three branches in China, we'll apply for a local banking licence. But we can't forecast a time frame for the upgrade, as that will depend on business opportunities," he said.

KBank, the country's fourth-largest bank by assets, opened its first Chinese branch in Shenzhen in 2008 in collaboration with China Minsheng Banking Corporation (CMBC) with a focus on small and medium-sized enterprise business.

The tie-up with the Chinese bank allows KBank's customers to use financial services offered by its Chinese partner.

KBank and CMBC jointly provide yuan-denominated credits to Thai companies investing in China and baht-denominated loans to Chinese companies investing in Thailand.

Other financial services include deposits, investments, risk management, yuan foreign exchange services and international trade.

KBank is exploring locations in western and southern China for the third branch's site.

Location, investment costs, business opportunities and available staff are the key factors for international expansion, said Mr Banthoon.

He said under these criteria, China's economic centres of Beijing and Shanghai do not catch KBank's eyes.

Siam Commercial Bank (SCB), meanwhile, has applied for a representative office licence from China's government. Approval and the office's opening are expected this year.

The bank is targeting Thai customers keen on investing in China and Chinese investors who want to invest in Thailand.

Bangkok Bank, Thailand's largest lender, is the only one operating in China under a local banking licence.

It has branches in Shanghai, Beijing Xiamen and Shenzhen.

SCB chairman Vichit Suraphongchai admits the bank is not strong enough in international banking, so it needs to develop the segment, particularly in Asian and Asean markets.

It may increase its shareholding in Vietnam's VinaSiam Bank from 33% if it receives approval from that country's government. The joint-venture bank has nine branches.

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