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Published on August 14, 2007

The source said the bank had been studying the retail-loan product for several years but had not yet entered the business, partly because of a lack of human resources, particularly top managers.

"Bangkok Bank approached the managing director of one car-leasing firm to help run its business but was unsuccessful," he said, adding that in all other regards, including infrastructure, Bangkok Bank was ready for the auto-loan industry.

Bangkok Bank's advantage over other car-loan providers is its capital base, network and customer base. If the country's biggest bank in terms of assets enters the market, it is likely to affect existing players.

Currently, Bangkok Bank is the only large bank not involved in auto loans. However, it owns 10 per cent of Toyota Leasing (Thailand).

Bank president Chartsiri Sophonpanich acknowledged that Bangkok Bank was studying the car-loan business, because that would contribute to the bank's revenues. However, it had yet to make any decision.

The industry source said Hongkong and Shanghai Banking Corp (Thailand) was also interested in the auto-loan business, and it was believed it would probably enter the industry with the help of strategic partners.

Pliu Mangkornkanok, CEO of Tisco Bank, one of the top players in the auto-loan industry, said his bank did not need strategic partners for either the banking or the auto-leasing and -loan business. It is able to expand the business on its own, and its car-loan portfolio has grown continuously.

Pliu believes Bangkok Bank will eventually join the car-leasing and -loan industry but is unable to anticipate the business model it will adopt. It could conduct the business on its own or find partners, he said.

Kasikorn Leasing (K-Leasing) managing director Isara Wongrung believes Bangkok Bank is likely to join the auto-loan market and that its participation will intensify competition. Over the next several years, survivors in the industry are expected to be leasing firms that are subsidiaries of large banks, he said.

Currently, the market's No-1 player in terms of new lending is SCB Leasing, a subsidiary of Siam Commercial Bank, followed by Thanachart Bank and Tisco Bank, both tied for second place. K-Leasing and Ayudhya Capital Leasing, affiliates of Kasikornbank and Bank of Ayudhya, respectively, are tied for third.

Somruedi Banchongduang

The Nation