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Tag: KBank

  • KBank Financial Conglomerate acquires additional investments in Bank Maspion

    KBank Financial Conglomerate acquires additional investments in Bank Maspion

    KASIKORNBANK FINANCIAL CONGLOMERATE has acquired additional investments in PT Bank Maspion Indonesia Tbk (Bank Maspion) in Indonesia through KASIKORN VISION FINANCIAL PTE. LTD. (KVF) and PT. KASIKORN VISION FINANCIAL INDONESIA. Following the capital injection, the post-investment valuation of Bank Maspion stands at 15.441 billion Baht, an increase of 8.0 billion Baht. Therefore, the subsidiaries increased its stake in Bank Maspion to 84.55 percent, from 67.68 percent, reaffirming its position as a controlling shareholder in this Indonesian bank. The move also reinforces KBank’s goal of becoming the largest bank in East Java.

    Mr. Pattarapong Kanhasuwan, Chairman of KASIKORN VISION FINANCIAL COMPANY PTE. LTD. (KVF), said, “KASIKORNBANK FINANCIAL CONGLOMERATE initially acquired a stake in Bank Maspion in 2017. In the latest development, the subsidiaries have acquired additional shares in Bank Maspion, increasing its stake to 84.55 percent. The valuation of Bank Maspion after the capital injection amounted to 15.441 billion Baht, increasing 8.0 billion Baht. This strategic move will contribute significantly to the continuous growth of Bank Maspion, strengthening its operations and enhancing its customer service capabilities, while fortifying KBank’s position as the controlling shareholder of Bank Maspion.”
    KBank has leveraged its more than 78 years of experience in the banking business, along with its capability and expertise in financial innovations and technologies, to cement Bank Maspion’s strengths in all aspects. Such endeavors are intended to ensure that Bank Maspion becomes a “Right Financial Partner” that can provide services beyond traditional financial products in order to support the growth of customers’ businesses and facilitate Indonesia’s long-term economic growth through the implementation of business strategies that focus on three customer segments, namely corporate, SME and retail.

    • Corporate customer segment has exhibited bright growth prospects and is a major driver of the Indonesian economy. With that in mind, KBank intends to enhance Bank Maspion’s service provision capability and deepen client relationships in order to be a potential source of financing and offer comprehensive banking services.
    • For the SME customer segment, KBank has developed and improved products and services to make it easier to audit income, approve loans and lift various restrictions in order to respond to customers’ needs more quickly while also maintaining the security of related transactions. KBank is planning to offer P2P lending soon, as well.
    • As for the retail customer segment, KBank aims to expand its retail customer base through the design and development of various products and services, including Payroll, QRIS (Indonesian Standard QR Payment), deposit accounts, and personal loans, while introducing marketing campaigns to meet the diverse needs and behaviors of retail customers in their daily lives.

    Mr. Pattarapong added that the capital injection is in alignment with the Bank’s strategy of business expansion to become A Regional Bank of Choice within AEC+3. The focus is on enhancing capabilities in financial innovations and technologies to provide services beyond banking solutions in response to current changes. KBank’s competitive advantage of a service network in key strategic areas across the region will strengthen connectivity between Indonesia and the AEC+3 market. The effort is in line with KBank’s goal of becoming the largest bank in East Java by 2027.

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  • Thailand’s KBank in talks to buy Vietnam lender in up to $1B deal

    Thailand’s KBank in talks to buy Vietnam lender in up to $1B deal

    Thailand’s second-biggest lender Kasikornbank is in talks to buy consumer finance provider Home Credit Vietnam in a deal of up to $1 billion that would further its push to expand in Vietnam, two sources said.

    The Bangkok-based lender, also called KBank, hopes to become one of Vietnam’s top 20 banks in terms of assets by 2027. It has total assets worth $119.7 billion, second only to Bangkok Bank in Thailand, Refinitiv data showed.

    The news comes at a time when Vietnamese banks are under pressure as a slowing economy and protracted turmoil in the real estate sector have stoked an uptick in bad loans and triggered broad rate cuts.

    A potential deal would underscore a trend of consolidations in Asia’s finance sector and make KBank’s the second-largest M&A transaction in Vietnam’s financial industry this year after the sale of a $1.5 billion stake in Vietnam Prosperity Joint Stock Commercial Bank to Japan’s Sumitomo Mitsui in March, according to Refinitiv data.

    KBank has talked to financial advisors to explore the potential acquisition, according to the two sources, although deliberations are still ongoing and no final decision has been made.

    “KBank is currently operating KBank Biz Loan solution, a credit service for small-scale retail stores. The potential deal with Home Credit will enable the bank to promote access to financial services for small business clients,” said one of the sources familiar with the matter.

    The sources declined to be named as the matter is private.

    KBank and Home Credit Group did not respond to Reuters‘s requests for comments.

    Vietnam, home to more than 100 million people, possesses a fast-growing working-age population where KBank estimated that over 69% of the population has no bank account, the highest in Asia.

    In June, the Thai lender obtained the Vietnamese central bank’s approval to raise its core capital for its business in the country to $285 million from $80 million, to become its second-biggest foreign bank.

    It had set a target of $400 million in net income, with outstanding loans of 180 billion baht ($5.13 billion) and customer base of 8.4 million in the country within 2027.

    Home Credit Vietnam, part of Netherlands-headquartered non-bank financial institution Home Credit Group, started operations in the Southeast Asian country in 2008 and has grown to now employ 6,000 staff serving 12 million customers, according to its website.

    Besides cash loans, the company offers installment loans to buy motorbikes and consumer durables. It has 9,000 outlets in Vietnam, its website shows.

    Home Credit Group is controlled by the Czech Republic’s biggest investment group, PPF, which was founded by late billionaire Petr Kellner. It reported a wider loss in the first half of 2022, mainly due to the impact from the sale of Russian operations.

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  • KBank Thailand expands into international market amid inflation time

    KBank Thailand expands into international market amid inflation time

    The target of creating a better credit environment for SMEs is KBank’s strategy upon entering the Vietnamese market.

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  • KBank appoints Ms. Voranuch Dejakaisaya as Executive Chairman-KBTG

    KBank appoints Ms. Voranuch Dejakaisaya as Executive Chairman-KBTG

    KBank recently announced the appointment of Ms. Voranuch Dejakaisaya as Executive Chairman–KASIKORN Business–Technology Group (KBTG) to supervise the IT systems of KBTG and KBank, and help steer the organizations’ transformation plans and regional expansion.

    Ms. Voranuch Dejakaisaya, currently aged 62, graduated with a Bachelor of Science, Statistics, Chulalongkorn University, and a Master of Business Administration (M.B.A), Chulalongkorn University. She has extensive work experience with a number of organizations, including GE Capital (Thailand) as Chief Information Officer SEA/IT Regional Head, Bank of Ayudhya PCL as Chief Information, and Siam Commercial Bank PCL as Chief Information & Operations Officer. Prior to her retirement, she was Chief Technology Officer at SCBX PCL. She then joined KBank as Executive Chairman-KBTG in May 2022.

    Ms. Voranuch Dejakaisaya received the “CIO50 ASEAN 2019” award (Ranked #1) from the International Data Group (IDG) – a world-class IT consulting company, and the “Chief Information and Technology of the Year 2019” award from The Asian Banker. Additionally, she was Chairman of the Thai Bankers’ Association’s CIO Club from 2019 to 2020.

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  • KBank earns S&P Global Sustainability Award with Gold Class distinction

    KBank earns S&P Global Sustainability Award with Gold Class distinction

    Kasikornbank (KBank) has risen to the forefront as a world-class Bank of Sustainability after it was awarded the prestigious S&P Global Sustainability Award with Gold Class distinction in recognition of its distinctive performance that has harmoniously integrated environment, social and economic/governance (ESG) aspects into its operations. The Bank has also demonstrated its commitment to developing its work in response to challenges and opportunities balanced across all dimensions.

    Ms. Kattiya Indaravijaya, KBank Chief Executive Officer, said that with our belief in the principles of a Bank of Sustainability under good corporate governance, appropriate risk and effective cost management, KBank has focused on a balance in our business operations across all three dimensions, i.e., the economy, society and environment. We are committed to elevating our standards of sustainable operations, as evidenced by our participation in both national and international assessments.

    KBank is the first and only Thai bank to be selected for inclusion in the Dow Jones Sustainability Indices(DJSI) for the sixth consecutive year. In the latest development, the Bank has won an S&P Global Sustainability Award, earning the prestigious S&P Global ESG Score with Gold Class distinction – the highest level in the global banking industry.S&P Global has assessed 7,554 leading companies worldwide which are members of the Dow Jones Sustainability Indices (DJSI). Of this number, 71 banks have been selected to be included in the Sustainability Yearbook 2022, with 3 banks earning Gold Class distinction; 14 banks, Silver Class; and 9 banks, Bronze Class.

    In considering the award, S&P Global has assessed KBank’s operations in three dimensions, as follows:

    In terms of the economy/corporate governance, S&P Global has assessed KBank’s operations, with the weight given to economic operations at 55 percent. The assessment shows that KBank has sound corporate governance operations, plus the best crisis and risk management, as well as anti-financial crime policies and measures compared to related operations of other banks worldwide. Additionally, KBank has created value from the efficient use of numerous resources, including financial data and technologies, while also collaborating with its business partners in various ecosystems with the aim of developing innovations and services to generate sustainable returns and meet the customers’ lifestyle and business needs during both the COVID-19 crisis and ‘new normal’ period in a sustainable manner.

    In terms of the society, S&P Global has assessed KBank’s operations, with the weight given to social contributions at 32 percent. The assessment shows that KBank has the best human rights operations, plus management of CSR activity, occupational health and safety, financial inclusion, and disclosure of social data compared to related operations of other banks worldwide. Moreover, KBank has promoted sustainable society by developing platforms for the provision of financial literacy and various skills to meet the lifestyle needs of the new era. Notable endeavors include the launch of Klasssi and AFTERKLASS platforms, and other CSR activities that are intended to maintain and foster cordial relations with communities under the ‘Tham Di Tham Dai’ (Employee Volunteer Hours) project.

    In terms of the environment, S&P Global has assessed KBank’s operations, with the weight given to environmental operations at 13 percent. The assessment shows that KBank has the best reporting system for environmental data compared to related operations of other banks globally. Under its environmental operations, KBank has announced its Net Zero Commitment.  

    Along with this, the Bank has developed its climate change strategies by making necessary adjustments to the Bank’s operations in order to reduce greenhouse gas (GHG) emissions and promote awareness of climate change among customers, businesses and the society as a whole. Such strategies should enable shifts in consumer behaviors, improvement of production processes, reduced energy consumption, and creation of real changes in alignment with this urgent agenda of the global community.

    Ms. Kattiya said in closing that with our belief in the principles of a Bank of Sustainability, KBank focuses on elevating our work standards, accounting for the environment, society and governance. This can be achieved through the development of environmentally friendly financial products and services in order to support our customers on their decarbonization journeys, and aid the Thai society in the transition to a net zero economy. Furthermore, the Bank aims to provide retail customers improved access to financial services in order to generate sustainable value for all stakeholders, and pass a sustainable world on to future generations.

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  • KBank to open a Ho Chi Minh City branch

    KBank to open a Ho Chi Minh City branch

    KASIKORNBANK (KBank) is gearing up to become The Bank of AEC+3 after the State Bank of Vietnam granted approval for the opening of a branch in Ho Chi Minh City, Vietnam. The Bank aims to serve Thai business customers, including large corporate and SME clients who have invested in Vietnam, as well as local retail customers. It targets lending of 10,000 million Baht in its first year of operation while also investing in start-up firms with the aim of scouting advanced digital technologies for increased business opportunities.

    Mr. Pattarapong Kanhasuwan, KBank Executive Vice President, said that KBank was granted a license to open a branch in Ho Chi Minh City on January 19, 2021, and the Bank is now preparing for its inauguration. The branch is scheduled to open its doors within the third quarter of this year in order to provide services to local customers, including Thai and foreign businesses investing in Vietnam. Attention is now focused on Vietnam as a regional investment hub that has attracted the world’s leading companies – including those from Thailand – thanks to its strong economy. As evidenced, Vietnam is the only ASEAN country that is presently enjoying positive growth. In spite of the COVID-19 pandemic, it is among the world’s top four countries in terms of GDP growth. The International Monetary Fund (IMF) has assessed that the Vietnamese economy will recover at a fast rate in 2021, with growth projected at 6.5 percent. This will likely attract international investors, both in Asia and the West, to steadily invest in Vietnam going forward.

    With these factors in mind, KBank has used the knowledge gained from services offered at its two representative offices in Hanoi and Ho Chi Minh City in order to upgrade the representative office in Ho Chi Minh City to a Bank branch. It will focus on offering services to Thai, Chinese, Japanese and South Korean companies wishing to expand their businesses in Vietnam for international trade and investment, as well as local entrepreneurs, especially those conducting business with Thai corporate customers of KBank.

    KBank has set operational targets for the Bank branch in Ho Chi Minh City once it

    is fully established in 3Q21. These include services primarily for business sectors related to Thai customers of KBank, in particular SMEs, trading, service, infrastructure and industrial businesses. Its services will then be expanded to retail banking, including deposit and personal loan, based on KBank’s digital banking expertise in collaboration with local tech start-ups through investment by KVision to ensure that such services meet the needs of local retail customers. In 2020, the number of internet users in Vietnam had reached up to 70 percent of the total 90 million population, and Vietnam’smarket was valued at USD13 billion. KBank’s investment in Vietnam differs from that in other AEC+3 nations, where the priority is on international business. KBank’s 4Q21 operational targets for the AEC+3 include deposits of 1.2 billion Baht and loans of 10 billion Baht.

    KBank will continue to operate through the Hanoi representative office to provide service and act as an intermediary between the KASIKORNBANK Head Office and Thai customers who are expanding their businesses to northern Vietnam. At the same time, the Hanoi representative office supervises investment projects that have received financial support from KBank, compiles market data to support customers’ business plans, and promotes trading activity and investment between Thailand and Vietnam. Thai exporters who ship goods to Vietnam will also be given more access to the ASEAN market through this international network.

    KBank’s approval from the State Bank of Vietnam to set up operations in Vietnam is a highlight of the Bank’s strategy in becoming The Bank of AEC+3 that will connect all of its services via an extensive banking network in various forms including locally incorporated institutions (LIIs), branches, representative offices and partner banks. At present, KBank has an overseas service network across the AEC+3 countries and several others, in 16 countries and with more than 84 partners worldwide.

  • KBank Completes First Transaction Reference to New Thai Overnight Repurchase Rate

    KBank Completes First Transaction Reference to New Thai Overnight Repurchase Rate

    Murex, the global leader in trading, risk and processing solutions for capital markets, powered an overnight indexed swap derivatives transaction for KBank based on THOR, the new Thai reference rate. KBank successfully completed the first such transaction referencing THOR on August 31. 

    The interest rate swap transaction based on THOR represents a critical inaugural step—it sets the stage for new markets for THOR-linked derivatives and cash products.  

    KBank, also known as KASIKORNBANK, executed the transaction after bespoke THOR mechanisms and configuration facilitated by Murex, a long-term technology partner to the Thai bank. KBank is Thailand’s largest lender by assets and has 70 years of experience in the country.  

    “This is a remarkable moment and an important milestone for KBank history and the local financial community to create a robust interest rate derivatives market based on THOR,” said KBank Capital Markets Business Division Head Thiti Tantikulanan. “The KBank team is excited to have been a part of this transaction. Our close collaboration with various stakeholders in Thailand, including the Bank of Thailand and the Murex teams, will contribute to the development of a liquid derivatives market based on the new benchmark rate after the LIBOR discontinuation at the end of 2021.” 

    In 2019, the Bank of Thailand, with inputs from the Thai Bankers’ Association and the Association of International Banks, established a Steering Committee on Commercial Banks’ Preparedness on LIBOR Discontinuation.  

    KBank was an active part of the committee, whose tasks included proposing the replacement rate for the Thai Baht Interest Rate Fixing contract (THBFIX), which LIBOR cessation puts at risk. That replacement rate is THOR, which was finalized in April. 

    “We’re very proud to have been an advising financial institution to the Thai central bank in this critical initiative,” said Thiti Tantikulanan. “To have completed the first transaction using this rate is a great feather in our cap. It is also an important milestone for THOR.” 

    Murex was thrilled to deliver the core technology to KBank, according to Guy Otayek, CEO of Murex APAC. 

    “Collaborating with KBank has always resulted in innovative solutions,” said Guy Otayek.  “Though we’ve been working with them for many years—KBank has more than 500 active users of MX.3—this transition project represents a longstanding commitment to bringing innovative solutions in Thailand and Southeast Asia. This first transaction powered by MX.3 is another great illustration of our unique expertise to help our client community transition away from LIBOR on data, analytics, operations and accounting, and provide them with the mechanisms to easily adopt new RFRs. This first transaction proves that Murex is the right partner to serve the capital markets here in Thailand.” 

  • Kasikorn Bank announced the nine-month period of 2019 net profit of Baht 29,924 Million

    Kasikorn Bank announced the nine-month period of 2019 net profit of Baht 29,924 Million

    Ms. Kattiya Indaravijaya, President of KASIKORNBANK, said Thai economic activity in the third quarter of 2019 continued to see few supports, after growing by 2.30% in the second quarter of 2019. The Thai economy showed signs of strength in the third quarter of 2019, due mostly to the low base effect of the same period last year, especially in the tourism sector. However, exports and private investment – two major economic drivers – continued to slow in line with the sluggish global economy and trade volume amid the protracted US–China trade negotiations and concerns over Brexit risks. For the final quarter of this year, a brighter outlook seems to be in store for the Thai economy, thanks to the government’s stimulus measures.

    Operating performance for the nine–month period of 2019, KBank and its subsidiaries reported net profit of Baht 29,924 Million, and reported net profit of Baht 9,951 Million, for the third quarter of 2019.

    Operating performance for the nine–month period of 2019 compared with the same period of 2018, KBank and its subsidiaries reported net profit of Baht 29,924 Million, a decrease of Baht 1,502 Million or 4.78% over the same period of 2018. Net interest income increased by Baht 4,051 Million or 5.54% mainly due to interest income from loans to customers and investments.  NIM stood at 3.34%.  Non–interest income decreased by Baht 2,753 Million or 6.20% mainly due to a decrease in net premiums earned – net and fees waive for money transfers through digital channels, while revenue from sale of securities increased.  Moreover, other operating expenses increased by Baht 2,684 Million or 5.49%, resulting in the cost to income ratio that stood at 43.41%.  KBank has set aside higher allowance for impairment loss on loans from the preceding quarter, with prudent consideration on factors in line with uncertainties from continued economic slowdown.

    Operating performance for the third quarter of 2019 compared with the second quarter of 2019, KBank and its subsidiaries reported net profit of Baht 9,951 Million, a slight increase from the preceding quarter of Baht 22 Million or 0.23% mainly due to an increase in net interest income increased by Baht 326 Million or 1.27%.  NIM stood at 3.34%.  Moreover, non – interest income increased by Baht 2,139 Million or 15.68% due mostly to revenue from sale of securities increased.  In addition, other operating expenses was approximate to the previous quarter.  In this quarter, cost to income ratio stood at 42.52%.  However, KBank has set aside higher allowance for impairment loss on loans from the preceding quarter, with prudent consideration on factors in line with uncertainties from continued economic slowdown.

    As of 30 September 2019, KBank and its subsidiaries’ total assets were Baht 3,240,134 Million, an increase of Baht 85,043 Million or 2.70% over the end of 2018.  The majority came from an increase in investments – net and loans.  NPL gross to total loans as of 30 September 2019 stood at 3.53% while at the end of 2018 this stood at 3.34%.  Coverage ratio as of 30 September 2019 stood at 153.58%, while at the end of 2018 this stood at 160.60%.  In addition, as of 30 September 2019, KASIKORNBANK FINANCIAL CONGLOMERATE’s Capital Adequacy Ratio (CAR) according to the Basel III Accord was 19.10%, with a Tier–1 Capital ratio of 16.76%.

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  • KBank issues USD denominated subordinated notes worth800 million USD, with oversubscription rate at 4.4x

    KBank issues USD denominated subordinated notes worth800 million USD, with oversubscription rate at 4.4x

    KBank has announced its successful issuance of USD denominated subordinated notes (the “Notes”) with a USD800 million offering that were oversubscribed four times. Such high oversubscription rate reflects the international investors’ confidence in KBank. It is the largest South-East Asia Reg-S-Only Tier-2 note issue in more than five years, and also the first USD-denominated 12NC7 Basel-III Tier-2 tenor from Asia (excluding Japan) in nine years.

    Mr. Predee Daochai, KBank President, said that KBank issued USD denominated subordinated notes worth 800 million USD with a 12-year tenor which will be due in 2031 and can be called in their 7-years (12NC7), offering at a fixed rate of 3.343 percent per annum. The objective of the issuance of the Notes which can be counted as KBank’s Tier 2 capital is to support KBank’s foreign operations. KBank also aims to strengthen funding position for suitable long-term funding cost.

    The Notes were issued through KBank’s Hong Kong branch on October 2, 2019 and were rated Baa3 by Moody’s, and BBB by Fitch Ratings, and were listed on SGX. The notes were offered to institutional investors and they were fully subscribed quickly. Of the total investors, 81 percent were in Asia and 19 percent were in Europe. Given the rarity of a Thai bank issuance, the Notes were deliverable to high quality investors with 80 percent being taken up by funds/asset management companies, with pensions/insurers and sovereign wealth funds buying up to 8 percent. Bank treasuries accounted for 3 percent of the orderbook, with the remaining 9 percent being taken up by other institution types. BNP Paribas, Citigroup, and Standard Chartered Bank acted as joint book-runners and joint lead managers.

    The issuance of KBank subordinated notes succeeds in several aspects. For example, the total books reached USD3.5 billion, representing 4.4 times of the value of the subordinated notes offered by KBank. Such high oversubscription rate reflects the international investors’ confidence in KBank and the Thai economy. This is because it is the largest South-East Asia Reg-S-Only Tier-2 note issue in more than 5 years and longest dated Basel III Tier 2 in Reg S Only format from Asia (excluding Japan).

    Moreover, the Notes have the lowest coupon as well as spread for a South-East Asia Tier-2 note issue in more than two years. The issuance is also the first USD-denominated 12NC7 Basel-III Tier-2 tenor from Asia (excluding Japan) in 9 years and the first ever 12NC7 from Thailand.

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  • 80 Percent of Thai Wealth Held Onshore

    80 Percent of Thai Wealth Held Onshore

    Lombard Odier is bullish about its onshore partnership strategy in Thailand, claiming that 80 percent of high net worth wealth remains onshore with local banks.

    The bank is bullish on Thailand’s wealth market, citing industry projections of 10-30 percent annual growth of high net worth individuals, depending on segmentation. Interestingly, the billionaire segment is expected to increase the fastest despite an ongoing U.S.-China trade war.

    Growth is here, said Lombard Odier’s APAC CEO Vincent Magnenat, who expressed optimism regarding the bank’s benefits from its four-year-old partnership with major Thai lender Kasikornbank (Kbank).

    Lombard Odier’s ventures into building onshore revenue lines have been supported not only by its investment capabilities but also through effective delivery to meet non-investment needs. According to Magnenat, the new generation of Thai entrepreneurs are increasingly demonstrating not only demand for professional investment management but also wealth planning and family or business governance needs.

    Perfect wealth comes from a combination of wealth and happiness; customers can live a worry-free lifestyle by easing their concerns in the areas of maintenance and succession of wealth, said Jirawat Supornpaibul, head of Kbank’s private banking group in a local media report.

    KBank’s private banking arm has assets under management of 760 billion Thai baht ($25 billion) with more than 11,000 clients and it estimates the latter to grow five percent annually.

  • KResearch revises downward its 2019 economic projection to 3.7 percent

    KResearch revises downward its 2019 economic projection to 3.7 percent

    KResearch held a panel discussion on “Measuring the Thai Economic Temperature after Election” on Tuesday April 2, 2019. According to KResearch poll conducted among members of the general public and the business sector before and after the election, it was found that the election has given a boost to confidence. Nevertheless, close attention should be paid to the formation of the new government which may influence the confidence.

    Ms. Nattaporn Triratanasirikul, KResearch Assistant Managing Director, holds the view that, “No matter how the government is formed, Thailand will be challenged by the global economic slowdown which will, in turn, affect its exports. The new government has to expedite the implementation of economic stimulus policies under the FY2019 budget, including the passing of the FY2020 budget bill. If the new government can be formed within June 2019 and the economic stimuli can be implemented as expected, household consumption will be boosted by 0.2-0.4 percent of GDP, and the Thai economy in 2H19 will be brighter than in 1H19.”

    However, KResearch has revised downward its growth forecast for the 2019 Thai economy to 3.7 percent, or within a band of 3.2-3.9 percent, from the 4.0 percent pace before. The new economic growth projection reflects an expected slowdown in Thai exports resulting from the economic downturn in Thailand’s key trade partners despite better-than-expected improvements seen in the US-China trade dispute. KResearch has also cut its export growth projection for 2019 to 3.2 percent from previously 4.5 percent, and its 2019 import growth forecast to 4.3 percent from 5.3 percent.

    For the outlook of domestic interest rates, Ms. Nattaporn expects the policy rate to be kept at the 1.75 percent throughout this year. High liquidity in local commercial banks and the banks’ approach to gradually approve loans currently should not intensify the competition in the commercial banks’ interest rates. As for the movement of Thai Baht, KResearch forecasts that the Thai Baht will weaken and move within the range of THB31.20-32.50 per dollar.  Factors deserve close attention are domestic issues, especially, political and economic situations.

  • Legacy Banks Must Become Agile, Says Citi

    Legacy Banks Must Become Agile, Says Citi

    New entrants and increased competition brought about by challenger banks could result in revenue losses of up to 30 percent among legacy banks over the next 10 years. While digitalization can lower costs for incumbent banks by 30 to 50 percent, new competition and greater transparency in the banking market, prompted by the emergence of challenger banks driven by fintech startups, are likely to lower revenues by 10 to 30 percent in the next decade, according to the report “Bank X: The New New Banks” published by Citi on Thursday.

    As legacy banks recognize the threat that new entrants into banking are posing to revenue and customers, they need to reinvent themselves and reimagine banking. This involves legacy banks partnering with technology companies to create effective joint ventures as well as moving into more disruptive technology and business models to transform themselves into digital competitors, the report said.

    If banks successfully transform digitally, their ROEs will rise from 8 percent in Europe and 16 percent in the U.S. to 15 percent and 24 percent respectively in a bullish scenario, and 5 percent and 10 percent respectively in a bearish scenario, the report noted.

    Bank X

    Built by new entrants, challenger banks designed around new digital technologies, leveraging data insights via agile technology stacks to offer customers better personalization and fully digital banking experiences. As they offer their services remotely via online or mobile banking, challenger banks tend to be quicker at incorporating new products or processes into their platforms and help easily connect with third-party products, ultimately offering more choices to the end-user.

    By creating their own Bank X, we believe legacy banks can transform themselves from slow-moving caterpillars to agile butterflies, Ronit Ghose, Citi Global Head of Bank Research, said.

    The report noted that while creating a new digital-only bank can help incumbent banks meet an evolving set of customer expectations quickly and effectively, setting up an independent challenger bank needs to be differentiated from digital transformations and core banking overhauls that they undertake. This is because creating their own Bank X requires independent application programming interfaces (APIs) and technology stacks, which is a significant departure from the operating model of incumbent banks.

    Need for Regulation in Asia

    Apart from the lower number of challenger banks in Asia compared to the U.K. and U.S., Citi noted that challenger banks in Asia are largely offshoots of big tech, telcoms, and banks. For example, WeBank, MYbank, and Kakao Bank are all backed by tech firms, KBank and Jibun Bank are backed by telcoms, while DBS has made progress in Indonesia and India with digibank, its own challenger bank.

    While Asia has several challenger banks originating from startups aiming to disrupt the financial system, Neat in Hong Kong or Paytm in India, they are exceptions. This is a result of the limited regulatory framework for challengers in Asia, with the emerging exception of Hong Kong, and the presence of large tech companies, particularly in China.

    Conversely, challenger bank activity is vibrant in the U.K. and Europe as a result of progressive regulations enacted to promote competition and break up the banking monopoly, the report said.

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  • Kasikornbank aims high as K Plus users pass 10 million

    Kasikornbank aims high as K Plus users pass 10 million

    Thailand’s fourth-largest bank by assets – by loans and deposits it also ranks fourth – has set some eye-catching targets. Take its K-Plus mobile banking offering. Already K-Plus has 10 million customers; that in itself is an already impressive number, given that Kasikornbank has around 14 million customers in total. And it represents impressive annual growth: the bank ended 2017 with 7.3 million users, up from 4.6 million the previous year, but it is a drop in the ocean compared to the target it has set.

    The bank believes it can grow K-Plus numbers to up to 100 million by expanding it to the regional market via partnerships. It is also continuing to target low-income earners who are not currently Kasikornbank customers.

    Organic growth targets for retail loans are in the range of 9-12% for 2019, and it is using machine lending and artificial intelligence technology to initiate financial and life solutions related to customers’ lifestyles and needs.

    K Bank grabs ride-hailing deal

    And then there is the investment in Grab: in November last year, K Bank invested $50m in the ride-hailing firm, with an aim to help launch the GrabPay electronic wallet in its sixth South-East Asian market in 2019.

    The deal also enables K Bank to use Grab’s data on merchants and drivers. The goal is to craft loan products while minimising non-performing loans with optimised use of data. So the Grab app will be integrated with the K Plus app and the bank will offer loans via the apps.

    Other 2018 highlights included a local chart-topping success in the Apple App store. K Plus is Thailand’s most popular app on Apple’s iOS platform outside the gaming segment, ahead of local rival banks Siam Commercial, Krung Thai Bank and Bangkok Bank.

    But it is the use of data and its potential for monetisation that really is attention-grabbing. K Bank really is aiming high in terms of becoming what it terms a ‘data-driven bank’, and believes that project data-driven data will account for one-half of its income by 2020.

    Such ambitions do not come cheap. K Bank’s IT group has set an investment budget for tech development this year of around $160m. It is, admittedly, a modest sum by Chase or Citi standards, but in the context of the Thai market, it is a significant investment. And if K-Plus can grow user numbers to anything approaching 100 million, and get close to its data revenue targets, K Bank will certainly put itself on the map.

    Mastercard trumps Visa for Earthport

    As EPI goes to print comes news that Mastercard looks to head off rival Visa as it attempts to buy Earthport for £233m ($306m).

    Over the Christmas period, Visa made an unexpected £198m bid for the company. The offer was recommended by the Earthport’s board and put to shareholders; however, in a statement to the market on 25 January, Earthport’s board withdrew its recommendation for Visa’s offer and urged shareholders to instead take Mastercard’s deal, which is at a 10% premium to Visa’s. Earthport’s shares, which have risen four-fold since Visa first offered to buy the company, rose another 30% to £0.36.

    Earthport has been around the block a few times since it was founded in 1997. It floated on AIM in 2009, and its adjusted operating loss for 2018 rose by 33% to £8.4m (FY2017: £6.3m). Its share price stumbled around single-digit territory for much of 2018, reaching a low of £0.055 in December, having peaked at £0.48 in April 2015.

    Earthport provides cross-border payment services in the UK, Europe, North America and internationally, operating through two segments: transactional and professional services. It does this through a combination of a network of segregated bank accounts in various geographies, software that mirrors movements of funds from bank to bank, and a knowledge base embedded in the platform and organisation related to each country.

    A deal for either Mastercard or Visa makes sense from the perspective of growing revenue from international money transfers. In other words, Earthport offers a revenue stream not dependent on traditional plastic cards. At the figures being canvassed the purchase price does seem steep, but is quite a coup for the new management team that took over at Earthport last year.

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  • KBank holds exam for eight graduate scholarships

    KBank holds exam for eight graduate scholarships

    KBank will hold an examination for eight graduate scholarships for 2019 at both local and international institutes in many fields, including business administration, finance and IT, the bank said in a press release on Thursday.Scholarships in business data analytics are offered for the first time this year to seek a new generation of employees with competencies to help KBank press ahead with the strategies to be Customers’ Life Platform of Choice and a Data-Driven Bank. Applications are open from now until April 9, 2019.

    Kattiya Indaravijaya, KBank President, said that because human resources are the nexus of any organizations and national development, KBank is offering eight full scholarships for master programs at both local and international institutions, as follows:

    Graduate scholarships at international institutes in countries determined by KBank, namely the US, UK, France, Switzerland, Japan, China, Hong Kong Special Administrative Region and Singapore, for 14 fields, including business administration, finance, financial engineering, international business, risk management, mathematics, statistics, data analysis, computer science – artificial intelligence (AI), machine learning, human computer interaction or UX UI design biometrics, computer systems and computational linguistics. Graduate scholarships in business data analytics are offered for the first time in 2019 in response to KBank’s operations to use big data in mobilising the business.

    For local institutes, KBank offers scholarships for students to study at Sasin Graduate Institute of Business Administration of Chulalongkorn University and Thammasat University in four academic fields, namely Master of Business Administration Program (MBA), Master Program in Financial Engineering (MFE), Master of Science in Finance (MSF) & Master in Finance (MIF) and Master of Science Program in Marketing (MIM).

    Qualified applicants for business data analytics study must not be older than 28 years old, while applicants for study in other academic fields must not be older than 30 years old and must be a Thai citizen with a bachelor’s degree in any field and a minimum of 3.0 GPA.

    People applying to study abroad must submit their test scores of language proficiency, GMAT or GRE per the criteria together with their applications. Interested persons can fill the application forms at www.kasikornbank.com and find additional information from KBank’s announcement or KBank’s Human Resource Development Department, tel. 02-470 3172 or KBankScholarship@kasikornbank.com from today until April 9, 2019.

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  • Thai’s KBank presses ahead with 2019 loan growth target of 5-7%

    Thai’s KBank presses ahead with 2019 loan growth target of 5-7%

    In the recently announced 2019 business plans, KASIKORNBANK (KBank) will press ahead to become the “Customers’ Life Platform of Choice” by using K PLUS to introduce financial and lifestyle services that suit individual clients. KBank’s financial and IT capabilities will be further enhanced through using data for decision making and steering business toward becoming a “Bank of Sustainability. The Bank has set 2019 loan growth target of 5-7%

    Mr. Banthoon Lamsam, Chairman of the Board of KBank, said that the Thai economy will likely post steady growth in 2019. Despite sagging demand abroad, domestic spending, buoyed by both public and private investments, may play a more important role in bolstering the Thai economic performance. It is expected the Thai GDP growth will reach 4.3 percent in 2019, which would be lower than the 4.6 percent pace projected for 2018 due to the slowdown in the export sector and tourism caused by the high 2018 base and the protracted US-China trade dispute that may dampen the global trade overall. Major drivers for the Thai economy in 2019 may include steady public infrastructure investment and the scheduled general election that will likely help reinvigorate investment climate overall while Thailand’s interest rates will be on the upward trend amid lofty household debt.

    Amid numerous challenges, KBank’s 2019 business operations will continue to focus on our “Customer Centricity” philosophy. With this mantra, we will press ahead with the “Customers’ Life Platform of Choice” strategy by using K PLUS, which has the highest number of users of any mobile banking applications in the country, to introduce financial and lifestyle services to meet the needs of individual customers. Our financial and IT capabilities will be enhanced further to allow KBank to be more responsive to every situation and become a data-driven bank, thus paving the way toward being a “Bank of Sustainability”.

    With regard to overall goals for 2019, KBank looks forward to achieving loan growth of 5-7%, which would be consistent with the 2019 economic growth, breaking down into corporate loan growth at 3-5%, SME loan growth at 2-4% and retail loan growth at 9-12%. We also set growth targets for our net interest margin (NIM) at 3.3-3.5%, and non-interest income growth at -5 to -7%. KBank’s NPL ratio is projected at 3.3-3.7%.

    Mr. Banthoon added that KBank continues to operate business, based on being a “Bank of Sustainability”, and under appropriate risk management and good governance. We are also building a balance in economic, social and environmental dimensions via strategies that will enable us to achieve and create sustainable returns over the long term. Such a sustainable development philosophy has been instilled in all of our operations until it becomes part of our corporate DNA, which has helped create maximum benefit for all stakeholders and promote sustainable growth to Thailand.

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