KASIKORNBANK (KBank) is gearing up to become The Bank of AEC+3 after the State Bank of Vietnam granted approval for the opening of a branch in Ho Chi Minh City, Vietnam.
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The Bank aims to serve Thai business customers, including large corporate and SME clients who have invested in Vietnam, as well as local retail customers. It targets lending of 10,000 million Baht in its first year of operation while also investing in start-up firms with the aim of scouting advanced digital technologies for increased business opportunities.
Pattarapong Kanhasuwan, KBank Executive Vice President, said that KBank was granted a license to open a branch in Ho Chi Minh City on January 19, 2021, and the Bank is now preparing for its inauguration. The branch is scheduled to open its doors within the third quarter of this year in order to provide services to local customers, including Thai and foreign businesses investing in Vietnam.
Attention is now focused on Vietnam as a regional investment hub that has attracted the world’s leading companies – including those from Thailand – thanks to its strong economy. As evidenced, Vietnam is the only ASEAN country that is presently enjoying positive growth. In spite of the COVID-19 pandemic, it is among the world’s top four countries in terms of GDP growth.
The International Monetary Fund (IMF) has assessed that the Vietnamese economy will recover at a fast rate in 2021, with growth projected at 6.5 percent. This will likely attract international investors, both in Asia and the West, to steadily invest in Vietnam going forward.
With these factors in mind, KBank has used the knowledge gained from services offered at its two representative offices in Hanoi and Ho Chi Minh City in order to upgrade the representative office in Ho Chi Minh City to a Bank branch.
It will focus on offering services to Thai, Chinese, Japanese and South Korean companies wishing to expand their businesses in Vietnam for international trade and investment, as well as local entrepreneurs, especially those conducting business with Thai corporate customers of KBank.
KBank has set operational targets for the Bank branch in Ho Chi Minh City once it is fully established in 3Q21. These include services primarily for business sectors related to Thai customers of KBank, in particular SMEs, trading, service, infrastructure and industrial businesses. Its services will then be expanded to retail banking, including deposit and personal loan, based on KBank’s digital banking expertise in collaboration with local tech start-ups through investment by KVision to ensure that such services meet the needs of local retail customers.
In 2020, the number of internet users in Vietnam had reached up to 70 percent of the total 90 million population, and Vietnam’s market was valued at US$13 billion. KBank’s investment in Vietnam differs from that in other AEC+3 nations, where the priority is on international business. KBank’s 4Q21 operational targets for the AEC+ 3 include deposits of Bt1.2 billion and loans of Bt10 billion.
KBank will continue to operate through the Hanoi representative office to provide service and act as an intermediary between the KASIKORNBANK Head Office and Thai customers who are expanding their businesses to northern Vietnam.
At the same time, the Hanoi representative office supervises investment projects that have received financial support from KBank, compiles market data to support customers’ business plans, and promotes trading activity and investment between Thailand and Vietnam.
Thai exporters who ship goods to Vietnam will also be given more access to the ASEAN market through this international network.
KBank’s approval from the State Bank of Vietnam to set up operations in Vietnam is a highlight of the Bank’s strategy in becoming The Bank of AEC+3 that will connect all of its services via an extensive banking network in various forms including locally incorporated institutions (LIIs), branches, representative offices and partner banks.
At present, KBank has an overseas service network across the AEC+3 countries and several others, in 16 countries and with more than 84 partners worldwide.