According to KBank President Mr. Predee Daochai, Thai economic growth will likely stand lower than 1.6 percent in 2014 due mainly to sluggish export and tourism sectors. The 2015 GDP growth is expected to reach somewhere between 3.5-4.5 percent, driven mainly by government spending and investments, thereby boosting total investments to grow 6 percent over-year. However, Thai exports may increase only 3.5 percent next year, due to mixed signs of global economic recovery, wherein a turnaround is witnessed in the US only.
The inception of ASEAN Economic Community (AEC) in 2015 has come under the worldwide spotlight and is hopeful to attract a large sum in foreign direct investments to the region. The regional economic growth is likely to expand at least 5.2 percent in 2015, making it the fifth largest global economy. The AEC+3 (including China, Japan and South Korea) with a combined GDP accounting for a fourth of the world’s economy will play a greater role in the economic advancement of Thailand and the region. China, in particular, has been Thailand’s number one export destination and is pursuing the “Going out” policy for its companies foreshadowing significant overseas expansion. Japan, which is our third largest export market, is using Thailand as its ASEAN production hub under the “Thailand plus one” policy. At the same time, Japan is moving labor-intensive manufacturing bases for goods or product parts to our neighboring countries including CLMV group + I (Cambodia, Lao PDR, Malaysia and Vietnam + Indonesia) where manpower is relatively cheaper and more abundant.
In light of this, Mr. Predee said KBank 2015 business goal has been set in tandem with economic conditions of Thailand and the region, with lending growth of 8-9 percent, net interest market (NIM) at 3.5-3.7 percent, non-interest income ratio at 40 percent and NPL ratio at 2.2-2.3 percent. The Bank will focus on its strategic direction of maintaining itself as “Customers’ Main Bank” across all segments, while maintaining its leadership of digital and transaction banking businesses. KBank vows to become the “AEC+3 Bank” with strong potential to service fast-growing cross-border investments and transactions in the region.
According to Mr. Teeranun Srihong, KBank President, four major strategic directions have been stipulated to achieve the Bank’s business goals in 2015:
1. To be “Customers’ Main Bank” across all segments with strong branding: According to recent industry surveys on customers’ main bank and brand strength, KBank has been one of the market leaders and will keep its leading position via professional financial and advisory services offered to all customer segments, under the “Customer Centricity” concept.
2. To place importance on business operations under the “excellent service” concept and to strengthen this market position: Brand awareness will be raised to emphasize the excellent service concept for the Bank’s outstanding service standard. Therefore, the Customer Service Fulfillment Division (CSF) has been established to implement this strategy.
3. To keep its leadership in digital and transaction banking services: According to a survey on perceptions of digital banking, KBank has been named the top player. The Bank aims to maintain its leadership in this business with innovative digital banking advancement to service the daily lifestyles of retail customers, while enhancing technology-based transaction banking services - with maximum information security - to efficiently satisfy the needs of SMEs and major corporate customers in the digital economy era. As the leader in digital financial and transaction banking services, satisfactory fee income is targeted.
4. To become the “AEC+3 Bank”: In responding to high-growth business potential upon the AEC roll-out, along with business opportunities with China, Japan and South Korea under the AEC+3 bloc, KBank plans to be a comprehensive business partner, servicing the needs of all customer segments. Therefore, the Bank aims to become the “Customers’ Main Bank” for foreign and cross-border transactions for all of the AEC+3 member states.
KBank now operates 16 overseas offices which are scattered across AEC+3 nations and elsewhere, comprising one locally incorporated bank in Lao PDR, six branches in Shenzhen, Chengdu, Hong Kong, Los Angeles, Cayman Islands and Longgang (sub-branch), and seven representative offices in Beijing, Shanghai, Kunming, Yangon, Hanoi, Ho Chi Minh, and Tokyo. The Bank is also arranging to set up two other representative offices in Jakarta and Phnom Penh. The Bank has established cooperative arrangements with 66 banks from nine countries, including China, Japan, South Korea, Germany, Italy, Lao PDR, Vietnam, Cambodia and Indonesia.
In order to realize its ambition in becoming the “AEC+3 Bank”, KBank, in 2015, is set to earn 471 million Baht from providing financial facilities for Chinese investors in Thailand, growing 16 percent from 2013 and 1.13 billion Baht for Japanese investors, also swelling 16 percent. The Bank also hopes for a 10-percent increase in total Thai-Sino and Thai-Japanese trade transactions via its offices to 396.71 billion Baht and 156.59 billion Baht, respectively. With ASEAN states, KBank expects to handle total bilateral trade transactions of 185.57 billion, climbing 34 percent.
In China, international transactions via KBank next year are targeted at 8 billion Yuan, soaring 60 percent from this year, with loans totaling 3.75 billion Yuan, or a surge of 44 percent. Deposits should amount to 4.95 billion Yuan, representing a 106-percent expansion. Upbeat prospects are also expected in Lao PDR, where transactions via KBank may total 3.0 billion Baht, with loans equaling 1.0 billion Baht – a rise of 150 percent, and 250 million Baht in deposits.
Mr. Teeranun summed up that funding demands will be amplified by the implementation of numerous projects. Intra-ASEAN trade volume will likely reach a combined value of over 11 trillion Baht, while state infrastructure projects are worth 2.4 trillion Baht. Domestic buoyancy may also be expected from the wave of urbanization in upcountry, particularly in the North Eastern and Eastern parts of Thailand where the growth is over 10 percent. Trending businesses in 2015 include construction materials, telecommunications, modern trade and border retail, tourism, health and exports of value-added merchandise, e.g., automobiles, lifestyle products, processed foods. The Bank is committed to providing financial assistance for corporations and SMEs, as well as services that support retail customers. The Bank is confident that 2015 will be another prosperous year to realize robust growth that will undoubtedly meet business targets, said Mr. Teeranun.