A Change of Guard

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Saturday 27 December 2014

Thailand's fourth largest bank looks to Phnom Penh branch

Give our kids a better deal 
BANGKOK (The Nation) -- After establishing a footprint in Laos via the setting up of a subsidiary earlier this year, Thailand's fourth-largest bank, Kasikornbank (KBank), is taking another major step in its regional expansion plans, this time in Cambodia, which is seen as a more challenging market in which to do banking business.

President Teeranun Srihong said the bank was in the process of submitting a proposal to the Cambodian authorities to open a branch in Cambodia.

If there are no obstacles, KBank should be able to establish a branch in Phnom Penh in the second quarter of next year, he said.

He said that conducting banking business in Cambodia would be more difficult than doing so in Laos, as the culture and nature of Cambodians were quite different from those of Laotians.

KBank has chosen to open a branch instead of setting up a subsidiary company, as it did in Laos, as Cambodia can be more flexible if it sees the benefits that a foreign bank can offer the country, whereas Laos has fixed regulations about establishing bank operations, he added.

At present, two Thai banks - Krung Thai Bank and Siam Commercial Bank - have a presence in Cambodia, with the latter operating under the name of Cambodian Commercial Bank, as its affiliated bank.

Having a local affiliate means Siam Commercial Bank can open more branches in Cambodia.

Bangkok Bank, meanwhile, resumed operations at its Phnom Penh branch this month.

As potentially the third Thai bank to establish a presence in the country, KBank must show Cambodian regulators that it can meet their requirements and offer something that the country needs.

"Under our proposal, we will help develop the SME [small and medium-sized enterprise] market in Cambodia, because it is an area that has not yet been focused on by other foreign and local banks," said Teeranun.

KBank will focus on international trade in Cambodia because it has Chinese and Japanese customers that have been referred from partner banks in China and Japan, and who want to do business in Cambodia, he explained.

Moreover, KBank will focus on lending for bilateral activities between Thai and Cambodian companies, as "Cambodian companies are seeking partners in Thailand for producing high value-added agricultural products for export," he added.

KBank does not plan to focus on retail banking in Cambodia, as local banks already concentrate on this sector, while its local partner in Cambodia - Canadia Bank - has captured business in the segment, as well.

KBank and its partner are moving in the same direction in terms of offering innovative financial products and services, which means the bank can use the Canadia channel in servicing Thai, local and multinational companies, said Teeranun.

In Cambodia, there are currently 28 local and foreign banks, plus seven specialised banks, which makes it an intensely competitive market.

Should KBank later decide to offer retail banking in the country, it will provide specific services such as wealth management and services linked to Thailand, said the president.

- See more at: http://www.thecambodiaherald.com/cambodia/thailands-fourth-largest-bank-looks-to-phnom-penh-branch-7938#sthash.e1Zlm5pC.dpuf

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