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NEWS UPDATES Asean Affairs           10   August  2011

Thai banks look beyond borders

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The new cycle of economic growth provides a greater opportunity for Asian banks to expand internationally. Thai banks, however, are moving more cautiously than most, given the hard lessons they learned from the devastating financial crisis 14 years ago.

As some major Western economies buckle under the weight of public debt, growth momentum is shifting East, opening up a chance for Asian businesses. As well, the Asean Economic Community, scheduled to take shape in 2015, has encouraged international investment in both the real and financial sectors across the region. Several Asian financial groups have positioned themselves as regional banks through aggressive merger and acquisition strategies.

Such circumstances have encouraged several Asian financial institutions to look abroad. The most prominent players among them are Malaysia-based banks such as the CIMB Group.

Positioning itself as a regional bank, CIMB has acquired other banks and opened several branches in Asia over the past few years. Its main markets are Malaysia, Indonesia, Singapore, Cambodia and Thailand, where it has CIMB Thai Bank.

Bangkok Bank, Kasikornbank and Siam Commercial Bank have resumed expanding their foreign business for a few years after a decade-long hiatus following the 1997 crisis. Although they may have different overseas strategies, they share the same concept of prudence.

BBL, Thailand's largest institution by total assets most active in foreign banking business, concentrates on opening branches across the region under its "Decade of Asia" strategy. Since last year, BBL has opened four new branches in Malaysia, with a plan for another in Indonesia this year.

Leveraging its expertise since opening the first branch abroad in Hong Kong 50 years ago, BBL, Asean's largest bank before the 1997 crisis, is now strengthening its overseas banking operation. With 25 foreign networks in 13 countries, BBL is now the fifth largest bank in Asean. It positions itself as a local bank supporting Thai companies investing abroad, strengthening their international competitiveness. Apart from large Thai companies, the bank supports the country's small and medium-sized enterprises expanding abroad as well.

Kosit Panpiemras, BBL's executive chairman, earlier said strengthening fundamentals would bring sustainable growth to its international banking business. At home, Mr Kosit thinks local financial institutions are strong enough to compete with foreign banks, commanding a large market share.

But Kasikornbank has a different strategy for its overseas business. The country's third largest bank counts on forging partnerships with local players in its international drive. It cooperates with China Minsheng Banking Corp, one of the biggest commercial banks in the mainland, in offering financial services to SMEs through KBank's lone branch in Shenzhen.

KBank recently signed agreements with the 15 Japanese banks, with deals with three more slated by the end of the year. It hopes to tie up with 25 Japanese financial partners by 2013. It is also searching for other foreign partners, particularly Vietnamese and Korean banks.

Siam Commercial Bank, the country's fourth largest, shares KBank's view, seeing financial partnerships as its major strategy. However, the bank will look for partners in the areas where its corporate clients are operating in order to provide financial support conveniently.

SCB has been quite aggressive in international banking for the past few years, advising local companies on mergers and acquisitions, as well as investing abroad.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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