Last year, Japan was the largest source of foreign direct investment in Thailand with Japanese companies investing about THB 81 billion in the country, according to the Board of Investment of Thailand (BOI). Further, a survey by the Japan External Trade Organization (JETRO) shows that Thailand is the fourth largest destination for future expansion for Japanese companies and Japan was the largest investor in 2020 and 2021.
As the first Japanese bank in Thailand, Sumitomo Mitsui Banking Corporation (SMBC) Bangkok Branch has been a cornerstone to the evolving needs of its Japanese and local customers since its inception in 1952. Thriving on the bank’s purpose to support increasing trading and investments in Thailand and Asia, SMBC has served as a gateway to investments, funding, and trusted financial products and services across its network in the region for the past 70 years.
“In Thailand, our unique connection with Japanese companies is one of our core business strengths,” said Mr. Makoto Takashima, President and Chief Executive Officer, SMBC. “Japanese companies have been actively investing in ASEAN, a growing market, to expand their businesses. SMBC is keeping pace by expanding its Asia network and business and focusing on strengthening ties with the local government and companies to support these Japanese corporates.”
Committed to rising with Thailand
Through its two branches in Bangkok and Chonburi, SMBC offers a suite of products and services, including business promotion, financial management, investment promotion and loans, which are further complemented by SMBC Group’s network of companies.
Reflecting on local priorities, Mr. Takashima commented, “Thailand 4.0 would be a significant catalyst of industrial development attracting foreign investors. The policy will enhance the country’s strong position and attract existing manufacturers to expand their investment. Earlier this year, SMBC signed a Memorandum of Understanding with the Eastern Economic Corridor office that accelerates this initiative by leveraging its strong and far-reaching network.”
“With Thailand’s supply chain and industrial agglomeration and high-quality infrastructure developed in recent years, the country will continue to be a promising destination for foreign investment for many years to come.”
Supporting customers at all times
Looking ahead at the economy, Mr. Takashima said, “The global economy is currently changing from low interest rates, excess liquidity, and deflationary conditions towards higher interest rates and inflation. With significant changes taking place, we will also need to evolve our thinking and approach.”
“In the near term, SMBC’s mission is to envision new ways to support and engage with customers to help them weather these storms reasonably well.”
“In the medium and long term, SMBC will focus on collaboration and a forward-looking approach – to address management issues and needs facing customers who are under pressure to transform their businesses, amid great changes to social structures and environments.”
“SMBC’s long history in Thailand and unwavering support to our Thai and Japanese customers is what differentiates us from others,” Mr. Takashima said. “We are also proud to be at the forefront of cutting-edge digital solutions and innovations that support the evolving demands and needs of our clients.”
Mr. Takashima explained how the bank overcame the pandemic-related challenges and maintained investor confidence in the Thai market. “As a financial institution, our role is to serve our customers, investors, communities and employees,” he said. “ It is key we look at things calmly from a macro view, assessing the trends, risks and opportunities, even amid turmoil around the world. This enables us to better react, prepare and agilely adapt to unforeseen events and continue our services.”
“The commitment of Japanese companies towards investing in Thailand has become even clearer through the pandemic,” he added.
In addition to Japanese corporates, SMBC also works closely with Thai companies in the automotive and electronics sectors. This is integral given the manufacturing sector customer base Japanese companies have in Thailand already.
“Automotive and electrical machinery sectors are important production bases for Thailand’s manufacturing industry, which is fuelled by the active investment of Japanese companies. SMBC is well-positioned to support the financial needs of companies in these sectors,” said Mr. Takashima.
Sustainability is foundational to the bank’s business
As a trusted leader in sustainable and green finance, SMBC continues to innovate and tailor its solutions to meet the evolving needs of its stakeholders and the environment.
Mr. Takashima explained, “We firmly believe in supporting our customers' transition journey to realise a net-zero society through close engagement and finance from a medium- to long-term perspective.”
In 2021, the bank attained a strong presence in green loans ranking first in the global league table. Recently, SMBC also extended a US$185 million Green Loan, the first green loan to the PTT group, focusing on the expansion of the company’s clean energy portfolio.
SMBC also has a long history of supporting the local community over the past 70 years. Beyond its crisis relief efforts and other initiatives, one of the bank’s most impactful programme is the SMBC Scholarship for students in Thailand established in 1962. The bank has committed more than THB 59 million and contributed to the development of a new generation of nearly 4,000 brilliant young Thais across five universities (Chulalongkorn, Thammasat, Chiang Mai, Khon Kaen and Prince Songkhla).
In 2021, SMBC started an initiative to provide access to safe and clean water facilities for rural schools.
“To mark SMBC Thailand’s 70th anniversary, we have expanded the safe water programme to another five schools and one orphanage,” added Mr. Takashima. “Our objective is to narrow inequalities that exist in terms of access to clean and safe drinking water among underprivileged groups as part of our mission to make sustainability a reality in the communities we operate in.”
About Japanese interest in Thailand
Since the Plaza Accord of 1985, Japanese companies have been affected by the sharp appreciation of the Japanese Yen currency, and an increasing number of companies have shifted their production bases to ASEAN. With many such companies entering Thailand, Japan topped the list in terms of foreign investment in the country.
Japan-Thailand relations are very longstanding, dating back to 1887. 2022 marks the 135th anniversary of relations. Across Asia, Thailand has the longest history of friendship and diplomacy with Japan. The country is also home to the largest Japanese diasporic community in the region. Nearly 81,000 Japanese nationals live in Thailand with approximately 5,800 Japanese companies here.