Thailand: Local banks eager to step up regional expansion

Local banks have continued to gear up for regional business expansion, aiming to create higher income from the growth potential of the Asean economy in the post-pandemic period.

Last week Kasikornbank (KBank) announced the complete acquisition of additional shares of PT Bank Maspion Indonesia Tbk with an investment value of copy86.5 million or roughly 6.53 billion baht.

The deal was conducted through KBank subsidiary Kasikorn Vision Financial Company Pte Ltd (KVF), raising KBank’s total shareholding in Bank Maspion to 67.5% from 9.99% earlier.

Pattarapong Kanhasuwan, KVF chairman, said it is the right time for additional investment in Bank Maspion as Indonesia recovers from the Covid-19 crisis. Indonesia’s domestic consumption, private investment and exports are expected to grow positively in 2023, increasing loan demand.

KBank is continuing to search for greater business opportunities among the Asean+3 (China, Japan and South Korea) grouping because of the exponential growth potential in the region, said Mr Pattarapong.

Asean is expected to post the highest global GDP growth rate following the pandemic, mainly attributed to Indonesia and Vietnam.

The bank is open to other business opportunities including mergers and acquisitions, especially in Vietnam and Indonesia.

KBank expects China’s reopening will take place in the second quarter next year, supporting business growth, he said.

KBank, the country’s second-largest lender by total assets, expects to generate net income for international business of 7 billion baht in 2023, rising from an estimated 3.8 billion in 2022. However, there are challenges amid a projected global economic slowdown.

Last month Krungsri, the country’s fifth-largest bank, announced a 75% majority stake acquisition of the consumer finance business of Home Credit in Indonesia and the Philippines, with an initial total consideration of €473.9 million or around 17.7 billion baht.

The deals are expected to be completed by the second half of 2023, according to the bank.

Bangkok Bank (BBL), the country’s largest bank and the industry’s top player in international banking business, also continues to search for new opportunities, especially in Asean after acquiring a majority stake in Indonesia’s Permata Bank in 2020.

The bank aims to continue growing the business carefully, with a goal of conservative growth.

As a result, BBL expects to increase its international loan portfolio to 25% of the total over the next few years from 24%, said senior executive vice-president Chaiyarit Anuchitworawong.