BBL anticipates Chinese revival on state support

Bangkok Bank (BBL) expects its banking business in China will gradually pick up on the heels of the improving coronavirus outbreak in the mainland and the Chinese government’s assistance measures.

Some commercial customers of Bangkok Bank China (BBC), which is wholly owned by BBL, have resumed activities and production after their operations were temporarily disrupted by city lockdowns to contain the spread of the disease, said BBL’s executive vicepresident Suwatchai Songwanich.

The number of new infections in China is declining, but the situation still needs to be closely monitored, he said.

The Chinese government has implemented measures to mitigate business impact from the outbreak and a large stimulus package is expected to jumpstart growth of the world’s second largest economy this year, said Mr Suwatchai.

Recently China’s central bank and financial regulators offered additional funds to banks to ensure small and medium enterprises (SMEs) access credit facilities of 537 billion yuan (2.43 trillion baht) to help them survive.

The People’s Bank of China also tapped medium-term lending facilities (MLF) to inject 100 billion yuan through seven-day reverse repos. The People’s Bank of China will offer a one-year MLF rate at 3.15%, down from 3.25%. The bank earlier this month pumped 1.7 trillion yuan into the financial system.

He said part of the monitoring includes assessing Chinese investors’ confidence in offshore investment. Chinese investors want to expand business operations and invest abroad in accordance with their government’s Going Out policy.

“The pandemic may nudge Chinese investors to focus more on outbound investment to diversify risks. Thailand is still a key destination for offshore investors, but the situation needs time to return to normal,” said Mr Suwatchai.

The bank has prioritised healthcare of all related parties, including staff, customers and business partners, he said.

BBC has five branches in China located in Shanghai, Beijing, Xiamen, Shenzhen and Chongqing, and a subbranch in the Shanghai Pilot Free Trade Zone.

BBL, the country’s second largest lender by assets and the biggest by international banking business area, has 31 foreign branches, including two wholly-owned subsidiaries, across 14 economies.

The bank’s international outstanding loans represent 17% of BBL’s total loan portfolio, which is targeted to increase to 25% after an acquisition deal with Indonesia’s PT Bank Permata is completed.

Thailand is still a key destination for offshore investors, but the situation needs time to return to normal. SUWATCHAI SONGWANICH Executive vice-president, BBL