Kasikornbank (KBank) is planning to open a branch in Vietnam's Ho Chi Minh City to expand the scope of its regional banking business in a high-growth economy, covering all loan segments.
KBank, Thailand's second largest commercial lender by total assets, received approval on Jan 19 from the State Bank of Vietnam to upgrade what had been its representative office in Ho Chi Minh City to a branch.
The bank is in the process of setting up the new branch, with the aim of expanding its banking services more widely within the regional market covering all customer segments including large corporations, small and medium-sized enterprises (SMEs) and retailers, said Pattarapong Kanhasuwan, KBank's executive vice-president.
KBank has been operating its banking business in Vietnam through two representative offices -- one located in Ho Chi Minh City and the other in Hanoi. The main focus of its business has been Thai wholesale clients investing in Vietnam.
Given the progress of digitalisation and Vietnam's strong economic growth potential, the bank will expand its customer base by adding to it Thai SMEs investing in Vietnam as well as individual Vietnamese clients.
"Due to greater business opportunities in Vietnam, the bank plans to expand into new client bases and is targeting loan growth of 10 billion baht for the first-year of business operations. The new Ho Chi Minh City branch is expected to offer services officially in the third quarter of this year," said Mr Pattarapong.
Despite the prolonged pandemic, Vietnam recorded positive economic growth at 2.9% in 2020. In an assessment of the Vietnamese economy, the International Monetary Fund anticipates that it will recover at a faster pace in 2021, with GDP growth projected at 6.5%. Under this scenario, Vietnam would attract foreign investors from around the world.
For KBank's international banking business focused on the Asean Economic Communtiy +3 (EEC+3) strategy, the bank will concentrate on attracting Thai, Chinese, Japanese and South Korean clients for its banking business operations in Vietnam. KBank plans to place an emphasis on services, trading and the manufacturing and industrial sectors.
KBank's retail banking business in Vietnam will mainly focus on deposits and personal loans. Given its digital banking expertise, KBank also plans to collaborate with local tech start-ups to explore new business opportunities in the regional market, Mr Pattarapong said.
In 2020, the number of internet users in Vietnam reached up to 70% of the country's total population of 97 million. Vietnam's e-commerce market was valued at US$13 billion.
