Published on April 25, 2008
The small bank, with support from its major shareholder Canada-based Scotiabank, aims to change its image and strategy to become an international bank.
This will need a change in structure by reducing hire-purchase operations, the long-term core business of Thanachart group, and boosting corporate lending.
More branches will be needed, while new financial products are to be developed.
"We want to be a mid-sized bank within three years under an economy that, I hope, won't deteriorate from the present growth of 4-5 per cent," Thanachart Capital president Supadej Poonpipat said in his press conference yesterday.
Thanachart Capital, a holding company, holds a majority stake in the bank.
He believes his bank will be able to sustain a return on equity of 12-15 per cent. However, Scotiabank wants the return to rise to 20 per cent over the long-term period.
To get 6-per-cent market share by 2010 from the current 4 per cent, the bank needs to increase its assets to Bt500 billion from Bt300 billion. Its assets would grow 15 per cent per annum. The bank also expects its market share to jump to 10 per cent in 2012. In terms of structure, the bank wants its hire-purchase business to fall from 70-80 per cent of loans to 60-65 per cent over three years, while SME loans will increase from 5 per cent of loans to 10 per cent. Retail loans are expected to rise to 10-15 per cent from 5-10 per cent.
For corporate loans, the bank needs Scotiabank's support through connecting with new markets including Egypt, Turkey and Pakistan. This is hoped to lift the bank's corporate loans from 10-15 per cent of loans to 15-20 per cent.
In addition, with the Canadian bank's support, Thanachart Bank plans to launch a credit card by the end of this year to access its customer base of around 400,000 accounts and expects this to increase to 1 million within three years.
With the bank's expanding business plan, the branch network will be more than doubled from 170 branches now to 430 in 2010.
Thanachart Bank was 24.9-per-cent acquired by Scotiabank in July 2005 after the bank upgraded from a large finance firm to a bank. Once the Financial Institutions Business Act is enforced in August, Scotiabank will apply the law and ask the Bank of Thailand for approval to boost its shareholding in the bank to 49 per cent.
Michele Kwok, senior vice president of Scotiabank in Asia-Pacific and the Middle East, said there were many opportunities for Thanachart Bank to grow.
She said Scotiabank would strengthen the bank in terms of multiple products including loan and investment tools with the devotion of manpower and experience.
Thanachart Capital's first-quarter net profit surged 76.1 per cent year on year to Bt1.02 billion, thanks to higher net-interest margins, non-interest income and cost control of its Thanachart Bank subsidiary.