Siam Commercial Bank (SCB), the country's third-largest bank by assets, is planning an aggressive expansion of its international banking business in the coming years, with a focus on Cambodia, Laos, Myanmar and Vietnam (CLMV) to capitalise on higher opportunities following the formation of the Asean Economic Community (AEC).
The CLMV market will be the bank's focus, as these nascent economies have high growth potential, said Manop Sangiambut, executive vice-president for international banking. Southern countries in Asean — Malaysia, Indonesia and the Philippines — are not included in the bank's targeted market, however, he said.
Foreign banks are keen to enter the AEC market to take advantage of the 10-nation bloc, which will kick off late next year. Like foreign banks, local counterparts in the region have also been in a flurry of broadening their business in the region.
SCB is present in Laos, Cambodia, Myanmar, Singapore, Hong Kong and Beijing. For these six international networks, four branches and two representative offices are located in Yangon and Beijing.
The bank also owns 33% of Vinasiam Bank, which has eight branches in Vietnam. The existing networks covering Asean will help to support the bank’s international business growth for the next two or three years, said Mr Manop. He said the loan amount extended by the bank's international business is still minimal compared with the bank’s total credit of 1.73 trillion baht.
After opening several months ago, the Beijing representative office received a good response from local business operators wanting to expand into Thailand and the CLMV market. China's Going Out policy encourages foreign direct investment by Chinese investors in emerging economies, particularly in the manufacturing and energy sectors in line with infrastructure development of such countries.
For Thailand, automobiles, auto parts and manufacturing are the core sectors drawing interest from Chinese investors. Given that Singapore and Hong Kong are Asian financial hubs, SCB's networks in these two markets will also support the activities of foreign investors in the Thai and CLMV markets amid the global economic recovery.
Even though foreign banking operations in Myanmar are currently limited by law, the sector has high growth potential. Both Thai and international investors are flooding into the resource-rich country. For Thai business operators, there are greater opportunities in light industry, food processing, consumer products and energy.
The partnership model is the preferred model for Thai investors expanding into Myanmar. SCB also partners with local banks in preparation for greater business opportunities when the neighbouring country opens up more, said Mr Manop. SCB shares closed Friday on the Stock Exchange of Thailand at 163.50 baht, down three baht, in trade worth 932 million baht.