Bank of Ayudhya (BAY) aims to transform half of its traditional branches into digital outposts over the next three years, mirroring similar announcements by its competitors.
BAY operates 663 branches nationwide, a figure it plans to maintain over the next three years, according to its 2018-2020 business plan.
The bank wants to transform some of these branches into digital and hybrid-digital platforms under its Digital First business strategy, said president and chief executive Noriaki Goto.
BAY yesterday said its pure digital platform will comprise 10% of its branches, while hybrid-digital outlets will make up 40%, with traditional outlets accounting for the rest.
"The bank will not close its existing branches, rather it will relocate or remodel its resources. Brick-and-mortar, digital, and hybrid platforms will respond to the requirements of each customer segment under the Krungsri brand," said Mr Goto.
The bank has no plans to trim its 15,019-strong workforce, but some "job rotations" will be needed, said a company spokesperson. Some traditional banking tasks will be performed by robots in order to reduce operating costs and increase productivity, allowing the bank to maintain earnings in the digital era, said Mr Goto.
BAY, the country's fifth-largest lender by total assets, will invest 20 billion baht in IT and its digital banking platform from 2018-2020. This year, the company will spend 8.5 billion baht on the initiative. According to its business plan, the bank's operating costs are targeted to decline by 10-15% in the next three years.
The bank plans to expand its retail loan portfolio to 50% of total outstanding debt by 2020, up from 47% at present. Retail loans represented 43% and 44% of debt in 2015 and 2016, respectively. Its retail loan portfolio now amounts to 730 billion baht -- 340 billion in auto loans, 220 billion in mortgages and 170 billion in unsecured finance.
Thai corporate loans represent 28% of its total loan portfolio, while SMEs account for 14% and Japanese corporate and multinational corporate loans are 11%.
The bank targets total loan growth of 6-8% this year, while reducing its non-performing loans below the current ratio of 2.5%.
The firm is targeting a coverage ratio above 140% by year-end. BAY aims to maintain its position as a top-tier financial group in Thailand, according to its medium-term business plan.