Thailand
KBank eyes B1.5bn in Cambodian loans
Kasikornbank (KBank), Thailand’s fourth-largest lender by assets, aims to lend 1.5 billion baht this year to corporate customers who invest in Cambodia after officially launching a full-service branch in the country.
Large Thai companies in need of financial support for expansion into Cambodia are the bank’s targets, said president Predee Daochai. KBank’s new Cambodian branch will provide more financial services to local business operators and retail customers over the next three to five years, he said.
Under the full-service licence, KBank can open more sub-branches in Cambodia, Mr Predee said, adding the bank has 100 Cambodian depositors.
Initially, the branch was aimed at supporting Thai businesses in corporate financing, fund mobilisation for investments in infrastructure projects, and the production of garments and processed food.
The funds are available in baht and riel for bilateral trade activities, other transaction services and business advisories to Thai investors in Cambodia, who are mostly engaged in trade, services, infrastructure and manufacturing. Cambodia has different financial transaction behaviours from Thailand, as evidenced by the rapid growth of non-bank agents that provide transaction services there.
KBank plans to increase retail loans and microfinancing in Cambodia, which has seen a significant rise in demand to serve business expansion. Agricultural credit is also in the pipeline.
Mr Predee said KBank is the first Thai bank to conclude a partnership with Wing Cambodia Ltd Specialised Bank, a leading provider of money transfer services there. This cooperation permits money transfers from Thailand to recipients in Cambodia via K-Mobile Banking and the Wing channel, and provides advisory services on trade and investment in Cambodia.
He said Cambodia has high manufacturing potential given its large workforce and high consumer demand and relatively low wages that should attract foreign investors, especially in apparel, processed food, electronic equipment and tourism. Cambodian economic growth has exceeded 7% annually over the past five years.
“The potential for Thai investment lies in their need for infrastructural development in roads, power plants and other utility systems, as well as in their growing property sector,” Mr Predee said.
The bank’s new branch in Phnom Penh is a part of KBank’s plan to become a regional bank connecting Thailand with the AEC+3. It operates a local bank in Laos and has representative offices in Yangon, Hanoi, Ho Chi Minh City and Jakarta. KBank follows Bangkok Bank, Krungthai Bank, and Siam Commercial Bank in expanding in Cambodia.
Ronadol Numnonda, assistant governor for the Bank of Thailand, said the country has strong nanofinance services that allow lower-income earners access to financial resources. Moreover, the financial services show positive asset quality, mainly because of the financial discipline of borrowers.
The Bank of Thailand has studied Cambodia’s nanofinance business model for application in Thailand, he said.
Ngern Tid Lor, a nanofinance lender under Bank of Ayudhya, recently slowed both its microfinance and nanofinance operations to fine-tune its new business models after experiencing high operating costs and rising non-performing loans. KBANK shares closed unchanged yesterday on the SET at 195.50 baht in trade worth 1.20 billion.
Source: http://www.bangkokpost.com/business/finance/1195385/kbank-eyes-b1-5bn-in-cambodian-loans