Bangkok--27 May--KASIKORNBANK
KASIKORNBANK is penetrating the Chinese market, planning to open five branches and upgrade them to locally incorporated entities in two years to serve local small and medium enterprises. The Bank has opened its second branch in China as a center to connect businesses of Western China, Thailand and ASEAN, targeting extension of CNY3 billion of loans in 2013.
According to KASIKORNBANK Chairman Mr. Banthoon Lamsam, KBank is penetrating the Chinese market, particularly its large and high-potential SME market. Over the next two years, KBank plans to open 2 to 3 more branches in China, which would increase the Bank’s branches in the country’s high-business-potential markets to five outlets, including the Chengdu Branch. Additionally, the Bank will open a sub-branch in Longgang, Canton, in the third quarter of this year, and upgrade it to a Locally Incorporated Institution (LII). This is aimed at expanding business and services to cover loans, deposits, and trade financing, and to serve Chinese investors who wish to invest in Thailand, and need KBank’s preparation in technology, infrastructure and staff knowledge.
The opening of the Chengdu Branch is part of the Bank’s service network enhancement under its Asian Bank strategy to promote Thailand as a center connecting Western China and ASEAN in terms of trade and investment. The main target is SME operators in Sichuan, which is a transportation and logistics center for Western China, with a GDP ranked the country’s eighth-largest.
The Chengdu Branch offers financial services for SME businesses in China and business operators with trade and investment in Thailand, China and the ASEAN Economic Community, as well as advisory service for Sino-Thai investment provided by Thai-, Chinese-, and English-speaking staff with relevant knowledge.
In 2013, the Bank plans to extend approximately CNY3 billion of loans in China through co-lending with Chinese partner banks and direct lending to recommended customers. At least CNY3 billion of deposits are expected from Chinese businesses that wish to invest in Thailand; their deposits in China can be used as collateral for loans in Thailand. The Bank targets CNY4 billion of trade finance transactions through its Shenzhen Branch. Meanwhile, KBank’s Chinese operations could generate earnings in their early years with good-quality loans, thanks to lending to SMEs and deposits from large customers. Loan growth in 2011-2012 was 68.40 percent. As of March 2013, outstanding loans totaled CNY1.51 billion, up 17.3 percent from the end of last year, and expected to increase by 132.56 percent by the end of this year.
KBank’s target customers both in Thailand and China are as follows:
- SME business operators in China’s high-technology and green innovation sectors, which are large and fast-growing markets.
- Business operators with Sino-Thai trade transactions including those producing electronics products (computer components and electronic parts), hardware (agricultural equipment and metal-cutting machines), chemical products used in the industrial sector, and exported foods.
- Growing Chinese businesses in Thailand: In 2012, at least 44 projects of diverse industries, including rubber and metal products from China, applied for Board of Investment’s tax privileges representing 12.83 billion Baht in value.
Mr. Banthoon added that KBank currently has three branches in China including the Shenzhen Branch, Chengdu Branch, and Hong Kong Branch; and three representative offices: the Beijing Representative Office, Shanghai Representative Office, and Kunming Representative Office. KBank’s partner banks in all countries of the Southeast Asian region can also serve the growing business demand between ASEAN and China.