KBANK chief for overseas partnerships

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.