Aug 18, 2012

Thailand - Banking on regional integration

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President of Bangkok Bank, Chartsiri Sophonpanich, is looking forward to the opportunities that the AEC will bring when it comes into existence in 2015

Chartsiri Sophonpanich, president of Bangkok Bank plc, Thailand's largest commercial bank by assets, says the advent of the Asean Economic Community (AEC) in 2015 will provide greater market access for Thai businesses operating in the 10-country regional grouping.

Outside Thailand, Bangkok Bank currently has a network of 25 branches in 13 countries. "We're quite well represented in Asean. For example, we have a local subsidiary in Malaysia with five branches. We have a branch in Singapore, two branches in Indonesia, another two in Vietnam, in Hanoi and Ho Chi Minh, as well as in Laos and Manila in the Philippines. In Myanmar, we've had a representative office since 1995.

"In terms of assets, we are probably No 5 in Asean after Singaporean and Malaysian banks, largely because we've been standing on our own feet since the 1997 financial crisis. Nevrtheless, we've been providing good services to our customers in the region, especially for trading and cross-border investments.

"Our Thai operation includes every aspect of banking services, but internationally we focus on business and related activities. We're not in consumer banking outside Thailand, as we focus on short-term and medium-term financing as well as working capital requirements.

"They are the hallmark of Bangkok Bank's services, as our customers for international banking services work with many overseas Chinese businesses based in Singapore, Hong Kong, Taiwan, as well as in Malaysia and Indonesia within their respective economies and across the region.

"One of our strengths is to assist our customers operating in the region, especially Thai companies as they explore new opportunities for better market access and better production capabilities via more regional resources and raw materials.

"Many Thai conglomerates have been working in the region for many years, such as PTT plc, Siam Cement Group, Ban Pu and CP Group. All of these are quite strong financially, technically and in terms of marketing, and should be able to expand significantly over the next five years.

"In business, competition is always inevitable, and we will have to live with increased competition when the AEC becomes effective in 2015. On the other hand, we also need to boost our efficiency and effectiveness.

"Most importantly, we need to be close to our customers, understand their requirements and be able to anticipate their challenges, and develop our skills accordingly. Manufacturing industries will remain important as will trading, commerce, energy, food, petrochemicals and tourism.

"Thailand has been a production hub for several industries for a long time, as evidenced by disruptions to the global supply chain caused by last year's massive floods. With the AEC integration, we could bring our partner countries into the process and use Thailand on a more value-added basis.

"On Thailand's weaknesses, I think we're probably not as systemically planned as a country, but our market-driven economy is quite resilient.

"In terms of Asean countries that are attractive for Thai businesses, I think the different countries are at different stages of development, but I think Indonesia is very interesting due to its abundant natural resources and a population of 240 million, which is the biggest in Asean.

"Indonesia's per-capita income is about US$3,000, while many positive changes are taking place, so the food, construction, energy, automotive, tourism, petrochemical, consumer goods and retail sectors are all attractive.

"Vietnam is at another level of development, with nearly 100 million people and a diligent workforce, so the country can be a strong production base for a number of industries such as electronics and the textile and garment sectors. In Myanmar, we are watching closely and preparing to play a role in the next few years. When permission is granted, we hope to upgrade the rep office in Myanmar into a full branch."

Nophakhun Limsamarnphun


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