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Krung Thai Bank: From government to private deposits

State enterprises form one of the largest customer segments of Krung Thai Bank. But this does not confine the bank, as it enters the nongovernment retail deposit market driven by a mix of competitive pricing and products, process innovation, and a strong branch network.

February 02, 2016 | Research

Thailand’s retail financial services industry, once a top growth engine, is losing steam. Profitability from retail banking is under pressure from lower loan growth, higher nonperforming loans, and product saturation in the wider Bangkok area. Against the backdrop of a low interest rate environment and further rate cates by Bank of Thailand (BOT) in 2015, the ability to capture low-cost deposits will be a decisive factor for profitability.
Higher costs should be lesser in banks with large, cost-efficient distribution channels offering convenience of access and a larger contribution of savings and current account deposits.

The challenge
Given the current beleaguered retail banking environment, Krung Thai Bank (KTB), which caters mainly to the government employee sector, is looking beyond the big brother that guarantees it a stable and low-cost funding source.

“We have a strong base of deposits from the government sector,” begins Chainarong Eursithichai, KTB executive vice president and director for retail strategy, product, and segmentation. “This success is based on our understanding of the mechanics of government transactions and our continuing process improvements in disbursement and payments. We want to be the deposit bank of choice for government entities, and so far, are managing 4 million government employee payroll accounts, which translates into a market share of 93%.”

Nevertheless, KTB, which has the largest retail deposit to total bank deposits ratio in Thailand (Figure 1), would like to expand its private deposits while maintaining leadership in government deposits. On top of this, there is room to grow especially in consumer finance and the small and medium enterprise (SME) sectors, whichremain underserved in Thailand. Although the SME market is smaller with higher risks. all banks have been
aggressively scaling up their SME businesses to offset slowing corporate and retail loans. T...

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Categories:

Branch Banking, Innovation, Payments, Private Banking, Retail Banking, Transaction Banking

Keywords:Krung Thai Bank, Bank Of Thailand, Loans, Retail, Deposits, SME, Private Transaction Banking, Branches, ATM


Krung Thai Bank: From government to private deposits

State enterprises form one of the largest customer segments of Krung Thai Bank. But this does not confine the bank, as it enters the nongovernment retail deposit market driven by a mix of competitive pricing and products, process innovation, and a strong branch network.

February 02, 2016 | Research

Thailand’s retail financial services industry, once a top growth engine, is losing steam. Profitability from retail banking is under pressure from lower loan growth, higher nonperforming loans, and product saturation in the wider Bangkok area. Against the backdrop of a low interest rate environment and further rate cates by Bank of Thailand (BOT) in 2015, the ability to capture low-cost deposits will be a decisive factor for profitability.
Higher costs should be lesser in banks with large, cost-efficient distribution channels offering convenience of access and a larger contribution of savings and current account deposits.

The challenge
Given the current beleaguered retail banking environment, Krung Thai Bank (KTB), which caters mainly to the government employee sector, is looking beyond the big brother that guarantees it a stable and low-cost funding source.

“We have a strong base of deposits from the government sector,” begins Chainarong Eursithichai, KTB executive vice president and director for retail strategy, product, and segmentation. “This success is based on our understanding of the mechanics of government transactions and our continuing process improvements in disbursement and payments. We want to be the deposit bank of choice for government entities, and so far, are managing 4 million government employee payroll accounts, which translates into a market share of 93%.”

Nevertheless, KTB, which has the largest retail deposit to total bank deposits ratio in Thailand (Figure 1), would like to expand its private deposits while maintaining leadership in government deposits. On top of this, there is room to grow especially in consumer finance and the small and medium enterprise (SME) sectors, whichremain underserved in Thailand. Although the SME market is smaller with higher risks. all banks have been
aggressively scaling up their SME businesses to offset slowing corporate and retail loans. T...

Please login to read the complete article. If you already have an account, you can login now or subscribe/register.

Categories:

Branch Banking, Innovation, Payments, Private Banking, Retail Banking, Transaction Banking

Keywords:Krung Thai Bank, Bank Of Thailand, Loans, Retail, Deposits, SME, Private Transaction Banking, Branches, ATM


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