• Fri
  • Dec 26, 2014
  • Updated: 12:25pm
Thailand Country Report

Bangkok Bank in pursuit of growth and opportunities beyond national borders

PUBLISHED : Friday, 08 November, 2013, 4:54pm
UPDATED : Friday, 08 November, 2013, 4:56pm

Growing alongside its customers and the nation, Bangkok Bank has been an integral part of Thailand's economy for almost 70 years. Thailand's biggest bank is increasingly making its mark beyond its national borders, taking advantage of the burgeoning opportunities offered by accelerating regional integration, with a major focus on the mainland and Hong Kong.

"These are exciting times for Bangkok Bank and its customers," says president Chartsiri Sophonpanich. "Asia is driving global growth and Thailand is well-positioned to benefit."

Bangkok Bank's regional track record is strong. For example, it was quick to spot the opportunities in China, opening a representative branch in Beijing in 1986, when the country was just starting to open up to the outside world. Its prescience should not be surprising, as it had long been among the top banks in the world for overseas Chinese. It entered Hong Kong as early as 1954, where it opened its first international branch.

Bangkok Bank's China connections run deep - its first customers were astute Chinese traders, who built business empires that extended throughout Southeast Asia and back towards China. The bank went with them and within a few decades, had built up one of the most impressive branch networks in Southeast Asia, connecting with its branches in Hong Kong, Taiwan and the mainland.

Today, the bank has 25 branches in 12 economies - the mainland, Hong Kong, Indonesia, Japan, Laos, the Philippines, Malaysia, Singapore, Taiwan, Britain, the United States and Vietnam - plus a representative office in Myanmar that has been in place for 18 years. The network is augmented by approximately 2,000 correspondent banking relationships around the globe.

Such an extensive reach provides the bank with a major competitive advantage as Thailand seems destined to become a hub of the Asean Economic Community (AEC), which will be formed at the end of 2015. Thanks to its high levels of economic growth, competitive labour force and great market potential, the country has become a magnet for overseas investors, including those from China.

Bangkok Bank's long history and close connections with China also gave it a head start over rivals when China began opening up its banking sector to foreign banks in the 1980s.

A wholly owned subsidiary, Bangkok Bank (China), was formed in 2009 - the first and so far only Thai bank to receive a local banking licence. While offering a broad range of financial and banking services, it focuses on providing services to companies with business interests in China and Southeast Asia - an important and growing market with strong investment flows in both directions.

Most of Thailand's major corporations are local enterprises that have grown with Bangkok Bank, and relationships between the bank and the companies' founders often extend through several generations. These companies are creating ripples across the world as they aggressively expand their international operations. In the past year alone, overseas investment by Thai companies exceeded US$14 billion, easily outstripping all other Southeast Asian countries and catapulting Thailand to the fourth-highest spot in Asia - after China, South Korea and India.

Founded in 1944, Bangkok Bank was one of the first companies listed on the Stock Exchange of Thailand and is seen as a bellwether stock for the overall economy. The bank has close to US$80 billion in assets, a domestic network that includes more than 1,000 branches and 230 business centres, and a diversified loan portfolio comprising corporates, mid- and small-sized businesses, retail and international customers.

Chartsiri, who has been at the helm for 19 years, says the bank's "greatest strength" is in corporate and business banking, where it is the market leader. "We are fortunate that opportunities will be greatest in these sectors in the foreseeable future."

Aside from the opportunities presented by the fast-growing economies of Southeast Asia, Thailand is at the start of a new investment cycle and the government plans to invest around US$70 billion in infrastructure projects over the next several years. "We are also planning to increase our retail lending operations to better balance our business base. We have more than 17 million deposit account customers, accounting for 20 per cent of the industry's total, and we are investing heavily to make better use of this base as a channel to provide a greater variety of products and services," Chartsiri says.

International banks have been active in Thailand for many years and are a growing presence as regulations are gradually introduced to open up the market to foreign competition. While recognising the strong competition from local and foreign banks, Chartsiri says he is confident that Bangkok Bank, and the Thai banking industry in general, is in good shape to respond.

"After nearly seven decades as a leading bank in Thailand, our name is naturally well-known and our reputation is strong. But we are always interested in tapping into new opportunities and attracting new customers," he says. Chartsiri recalls how Thai banks - and many of their customers - went through a difficult time in the late 1990s with the tom yum goong, or Asian financial crisis. As a result, however, a much stronger banking industry emerged. "Thailand's regulatory framework today is very sound, and there's a high degree of confidence in the banking sector," Chartsiri says.

While the AEC will further intensify competition, Chartsiri sees more opportunities than threats ahead.

"Internationally, we still have a lot of potential to grow. For example, as part of the AEC blueprint, certain 'Qualified Asean Banks' will be allowed to expand into other Southeast Asian countries with ease, providing them with a kind of single 'passport' for regional expansion. Bangkok Bank hopes to be one of them."

Chartsiri says Bangkok Bank is prepared and well-capitalised with a strong balance sheet. The bank has detailed knowledge of local markets and conditions in Thailand and across the region. "We have a solid base for further expansion," he says.

This expansion is likely to proceed organically, rather than through acquisition, and at a pace in keeping with the bank's prudent and cautious strategic approach.

Key strategies

"Cultivating quality relationships is crucial to having long-term customers," Chartsiri says. "We like to get to know our customers and understand their businesses, so we can identify their future needs and provide appropriate services and support."

Bangkok Bank abides by its motto, puan koo kit mit koo baan, which means "we aspire to be a financial partner and trusted friend to our customers".

Chartsiri says that the bank's philosophy of emphasising the importance of partnership has enabled it to develop long-term, trusted relationships with customers that extend over many decades.

"Our international network is clearly an important competitive factor for us.

"Our people on the ground in these markets and our specialists in the head office are experienced and really know their customers," Chartsiri says.

"We focus on markets where our customers have seen good opportunities and local conditions are appropriate. That approach has proven successful for us over many years and we will continue to follow it."

Bangkok Bank can provide information and advice on trading, setting up a business, taxation, obstacles, opportunities and challenges, and economic trends that will benefit customers keen on trading or establishing a presence in key markets.

Hong Kong is a key element in the bank's international network. The bank's two branches located in Central and Kowloon work closely with Bangkok Bank (China) in Shenzhen, Shanghai, Xiamen and Beijing. Many international customers borrow funds for investment and projects across the region, including Hong Kong, Taiwan, Singapore and other countries in Southeast Asia.

Chartsiri also notes how Bangkok Bank is working with many international companies that are showing keen interest in investing in Thailand and the Asean region.

This includes supporting large Chinese, American and European companies setting up operations in Thailand and forming co-operative agreements with Japanese banks to assist their customers to invest in the region.

"Now is a good time to be doing business in Asia and Thailand. New opportunities are arising every day, and Bangkok Bank aims to be there with its customers to make the most of them," Chartsiri says.

 

Bangkok Bank
www.bangkokbank.com

Share

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or