KBANK chief for over­seas part­ner­ships

The Pak Banker - - COMPANIES/BOSS -

KBANK pres­i­dent Predee Daochai says weak op­er­at­ing en­vi­ron­ment and lim­ited prospects for eco­nomic growth re­main ma­jor dilem­mas for Thai banks, in­clud­ing Kasiko­rn­bank.

How­ever, he ex­pects that the in­vest­ment-led eco­nomic re­cov­ery will ac­cel­er­ate in 2016, and the re­cov­ery will drive stronger earn­ings for the bank this year. Predee Daochai, Kasiko­rn­bank's pres­i­dent and di­rec­tor, dis­cussing about the lat­est trends and chal­lenges in Thai­land's bank­ing sec­tor said we see four ma­jor trends. The first is we fore­see more trade agree­ments will be made be­tween coun­tries.

The se­cond trend is tech­no­log­i­cal in­no­va­tion - cus­tomers want to be able to do their bank­ing any­time, any­where. They are ex­pect­ing bet­ter and faster ser­vices. We have been pre­par­ing our­selves to deal with all those is­sues and think­ing about how we will trans­form Kasiko­rn­bank into a more dig­i­tal or­ga­ni­za­tion.

The third trend is the ag­ing so­ci­ety in Thai­land. By 2022, more than 20% of the pop­u­la­tion will be aged 60 and above. We have to pre­pare our­selves for this de­mo­graphic shift.

Lastly, ur­ban­iza­tion and re­gion­al­iza­tion is a ma­jor trend. In the past, most of our in­come came from Bangkok. But now, other provinces show more po­ten­tial than Bangkok it­self be­cause the other provinces are grow­ing faster. A main chal­lenge for the bank­ing sec­tor is the slow re­cov­ery of Thai­land's econ­omy brought about by the slow re­cov­ery in ex­ports, slug­gish do­mes­tic con­sump­tion, and weak in­vest­ment sen­ti­ment. Th­ese fac­tors will af­fect busi­ness loans and loan-re­lated fees be­cause loan growth will be slug­gish.

In 2015, the year-on-year loan growth for the whole sys­tem reached 6-7% at most, com­pared to 2014 when loan growth was 9-10%. Banks also have to pay more at­ten­tion to as­set qual­ity and in­ter­est rates. Dur­ing the cur­rent slow­down, banks may have to set aside ex­tra re­serves to re­flect the loan dy­namism in this cy­cle. The in­ter­est rate move­ment could be a del­i­cate is­sue. If in­ter­est rates go up, the higher in­ter­est rates will im­pact some cus­tomer seg­ments, in­clud­ing SMEs.

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