Bangkok Bank (BBL) plans to maintain the loan proportion of its international banking business at the existing level of 24-25% of total loans for the next few years, despite the high growth potential of regional markets.
BBL, the country's largest lender by total assets, expects the loan portfolio of its international banking business to increase marginally to 25% of total loans outstanding in three years, up from 24% at present, said senior executive vice-president Chaiyarit Anuchitworawong.
He said although there are great opportunities, especially in the regional markets as Asean grows, the bank's international banking business did not set an aggressive growth target and will remain focused on asset quality.
The bank's international segment has yet to finalise a business plan for 2023. It has more than 300 international branches in 14 economies worldwide.
For 2022, the segment set a double-digit growth rate for both loans and income, said Mr Chaiyarit.
He said Indonesian subsidiary Permata Bank contributed the highest revenue among all overseas subsidiaries, followed by those in Hong Kong, Singapore, Vietnam and China.
After the complete acquisition of Permata Bank in 2020, the subsidiary has contributed significant income to BBL, said Mr Chaiyarit.
However, BBL has no plan to acquire or invest in other regional banks because it remains focused on organic growth.
Permata is its only international subsidiary operating a retail banking business.
BBL does not plan to offer consumer banking nor small and medium-sized enterprise lending via other international subsidiaries, focusing instead on corporate banking business, he said.
For international wholesale loan expansion, BBL is concentrating on the manufacturing sector, food and beverages, consumer goods, renewable energy, and environmental, social and governance (ESG) industries, in line with global trends, said Mr Chaiyarit.
"Governments in several Asean countries have been paying attention to ESG and supporting related businesses, including renewable energy and electric vehicle projects. There is high growth potential in these businesses across the region," he said.
Mr Chaiyarit said the bank's international banking business does not focus on the sensitive property sector and extends real estate loans selectively, noting this sector has been quite volatile in China and Vietnam.
In China, the bank's property loan portfolio represents around 1% of its total loan portfolio.
BBL is focused on providing finance to existing customers that have solid liquidity, a low debt-to-equity ratio and a strong reputation, he said.
Despite the higher uncertainty of the property market in China, the bank believes it can control the risk, said Mr Chaiyarit.
He said BBL has no plan to open more branches in the region. With existing regional networks in nine of the 10 Asean countries, the bank can cover customers' inbound and outbound business expansion.
BBL also developed digital technology to support the international wholesale banking business, Mr Chaiyarit said.
