BanksFinance - Banking - Money

Kasikornbank Opening Bank In Laos This Month

Kasikornbank is venturing into the Asean market by opening a bank with registered capital of Bt1.2 billion in Laos. The bank, which will commence operations this month, will focus on high-end customers and groups of companies investing in that country.

Teeranun Srihong, president of KBank, said its board had approved setting up Kasikornbank Co Ltd in Laos to handle the Thai parent’s business there. KBank will hold a 90-per-cent stake in the company and Kasikorn Asset Management the rest.

With its high growth potential, proximity to Thailand, and small number of privately run banks, KBank sees Laos as attractive for business.

In the initial stage, Kasikornbank Co Ltd will focus on corporate loans, of which the total outstanding in the country amounts to about Bt100 billion. Most of these will involve border trade.

“Next year, KBank targets about Bt3 billion in trade transactions and investments between Thailand and Laos of about Bt4 billion. Loan extensions are targeted at Bt800 million to Bt1 billion,” Teeranun said.

Total deposits in Laos currently stand at Bt100 billion, and KBank plans to have about Bt100 million of that amount by the end of next year.

“We will operate a local bank in Laos, not a branch, and focus on private banking with a planned electronic service,” he said.

He said the bank in Laos was the first for KBank in the so-called CLMV (Cambodia, Laos, Myanmar and Vietnam) area. The company has submitted a request to set up in Myanmar but has not yet received a response. It is now negotiating with Cambodian authorities on opening a branch there.

KBank, which earns less than 1 per cent of its income from foreign operations, operates three branches in China and two representative offices in Vietnam.

KBank collaborates with a local bank in Indonesia to take care of investments between that country and Thailand.

It is discussing with that bank the possibility of providing retail loans and inter-trade services, expecting to finalise the issue late this year or early next.

Several factors have to be considered when setting up foreign branches, and every country has different regulations, Teeranun said.

Sasithorn Pongsathorn, president of Land and Houses Bank, said it had added foreign-exchange services in 16 of its branches.

The currencies in service include the US dollar, the euro, pound sterling, Japanese yen, Hong Kong dollar, Australian dollar and Singapore dollar.

Source: The Nation