KBank eyes real estate advisory

Kasikornbank

(KBank) is seeking the Bank of Thailand’s approval for a series of services involving real estate advisory for high net worth customers.

The central bank will take into account customer demand and service solutions that help customers manage their assets and build up wealth, said Jirawat Supornpaibul, head of KBank’s private banking division.

The bank’s property advisory services proposal includes real estate brokering, land and property utilisation, matching sellers and buyers, and financial advice for business partnerships and mergers and acquisitions.

Other financial institutions are also seeking the central bank’s nod for their real estate advisory, but the regulator has yet to provide approval because it is cautiously considering the issue to prevent any speculative activity in the property market.

“The new service will be exclusively offered to private banking customers, and the bank itself has no policy to include the property market in its investment portfolio,” Mr Jirawat said.

Demand in real estate advisory services from high net worth customers has risen since the Finance Ministry announced plans for a beefed-up land and buildings tax. KBank offers private banking services to clients with assets under management (AUM) of at least 50 million baht.

KBank, the country’s fourth-largest lender by assets, aims to increase the AUM of its private banking business from 760 billion baht last year to 770 billion this year, while raising market share from 33% to 34%.

New customers will contribute to growth, while current “wisdom” customers whose AUM exceeds the segment’s criteria will be upgraded to private banking clients, he said. Wisdom customers are required to have assets worth 15-50 million baht.

The bank wants to add 300 new customers to its private banking business this year. Its total private banking customer base last year was 10,000.

In Asia, the high net worth individual customer base rose by 10-11% a year on average over the past five to six years, beating the global average of 9%. The growth trend in Thailand is expected to continue.

Providing a better return on investment for clients will enable AUM growth, said Mr Jirawat.

KBank aims to generate yield on assets from the private banking business of 0.37% this year, up from 0.29% in 2016.

The banks also plans to increase the yield to meet the international standard of 0.5% within three years as it seeks to maintain its leadership in the segment.

KBANK shares closed yesterday on the Stock Exchange of Thailand at 189.50 baht, down one baht, in trade worth 875 million baht.