Guided by the principles of a Bank of Sustainability, KBank unveils its strategic directions which focus on business growth, customer responsiveness and enhancement of end-to-end work efficiency; it also aims for loan growth of 5-7 percent in 2023 amid a “K-shaped” economic recovery
Guided by the principles of a Bank of Sustainability, KBank
unveils its strategic directions which focus on business growth, customer
responsiveness and enhancement of end-to-end work efficiency; it also aims for
loan growth of 5-7 percent in 2023 amid a “K-shaped” economic recovery
KASIKORNBANK (KBank) has established its business
directions in accordance with the principles of a Bank of Sustainability. To
advance its K Strategy, the Bank prioritizes business growth and customer
responsiveness: dominate digital payment, reimagine commercial and consumer
lending, democratize investment and insurance, and penetrate regional market in
the AEC+3 region. In parallel, it focuses on enhancing the customer experience
across all channels while also upgrading its long-term competitiveness. All of
these endeavors are undertaken in order to secure the Bank’s status as a
leading financial institution, to prepare for potential economic volatility,
and to drive the Thai society and economy towards sustainable growth. For its
financial targets in 2023, KBank aims for loan growth of 5-7 percent and control asset quality with NPL ratio targeted less than 3.25
percent. In addition, KBank still proactively embarked in take care of and continuously
provide assistance to customers.
Ms. Kattiya Indaravijaya, KBank Chief Executive Officer, stated that the Thai economic recovery in 2023 has thus far gained
traction compared to 2022. Thai GDP is expected to grow 3.7 percent, driven
mainly by tourism given China’s reopening policy. However, tourist arrivals are
unlikely to return to pre-COVID-19 level until 2024, while risk lingers from
slowing exports as advanced economies are lapsing into a recession. The Thai
economy will therefore see an uneven or “K-shaped” recovery as improvement will
vary across different businesses amid persistently high operating costs as
evidenced by rising wage and interest rate trends as well as high household
debt.
KBank
has announced its financial targets for 2023 with growth in line with
the prevailing economic conditions and its prudent business operations. In
detail:
· Loan growth of 5-7% will be mainly from
regional expansion strategy to seek new source of revenue and be more
diversified, along with growing corporate lending. The Bank will continue to
focus on quality using effective data analytics capability, analyzing to find
customers who are interested in loans and have ability to pay, and screen and closely
monitor credit quality. The Bank targets to grow corporate loans by 4-6%, SME
loans by 1-2%, and retail loans by 2-4%.
· Net Interest Margin (NIM) will be at 3.30-3.45%,
in line with interest rate trend and loan growth, along with good funding cost management.
· Net fee income growth will remain flat due
to changes in consumer behavior that will affect conventional transaction fees.
Wealth management business, and products related to tourism business will
expand.
· Cost to income ratio is expected to stand
at low- to mid-40s level as income growth in line with the gradual economic recovery, while the
Bank continues to focus on cost management and productivity improvement.
· NPL ratio (Gross) less than 3.25 percent as Thai economic growth will be in K Shape.
Uneven economic recovery continues to impact credit quality. The Bank will
continue to proactively manage asset quality.
· Credit Cost is expected to be in the range
of 175-200 bps, gradually decreased
from the peak level in the previous year. The Bank continues on prudent
financial policy when considering expected credit losses.
Ms.
Kattiya said, “For business strategies, KBank will continue to advance
its business through the principles of a Bank of Sustainability under good
corporate governance, appropriate risk and cost management, with the aim of
empowering every customer’s life and business.” The Bank’s business strategies
are as follows:
1. Sustainable Development: KBank has
operated business in accordance with ESG principles across all three dimensions
– environmental, social and governance (ESG). We prioritize the development of
competitive capabilities in a technology-driven business world that goes beyond
banking and innovation, amid the ever-evolving technology, consumer behavior
and environment. Our focus is also on creating a strong brand under the single
brand of KASIKORNBANK.
2. Growth Strategy: To advance K-Strategy
for business growth and customer responsiveness. Our growth strategies include dominating digital payment, reimagining commercial and consumer lending, democratizing
investment and insurance, and penetrating regional markets in the AEC+3 region.
We also focus on strengthening harmonized sales and service experience,
seamlessly integrating all service channels of KBank through K PLUS – our key
service channel. Along with this, KBank will enhance basic infrastructure to
offer an excellent customer experience across all service channels.
3. Key Capabilities: End-to-end work
efficiency enhancement. We
prioritize upgrades of our long-term competitiveness through five key
capabilities, namely, 1) Data: Development of data analytics capability to
enhance business opportunities and operational efficiency; 2) Human Resources:
Being the Best Place to Work, Learn and Lead; 3) Information Technology:
Adopting modern, world-class technology to make KBank the top regional
financial service provider; 4) Proactive Risk & Compliance: Proactively
identifying potential risks and establishing loss prevention and detection; and
5) Value-Based Productivity: Enhancement of work efficiency through creation of
value proposition.
In 2022, KBank
established strategic directions under a novel business model in order to
enhance customer responsiveness in answer to the changing business contexts.
Notable efforts include its joint investment with JMT Network Services PCL
(JMT) in setting up JK Asset Management Company (JK AMC) – Thailand’s first
joint venture co-owned by a commercial bank and an AMC in order to improve
asset quality management. KBank also introduced “K PAY LATER” – a loan designed
specifically for small-pocket customers’ daily spending – the first of its kind
in Thailand. In order to expand its reach to other countries within AEC+3, the
Bank increased its shareholding in PT Bank Maspion Indonesia Tbk to 67.5
percent and opened the Ho Chi Minh City Branch in Vietnam, while also launching
K PLUS Vietnam so as to create a Digital Lifestyle Ecosystem for retail
customers in this market. In 2023, the Bank will continue to implement its
strategic projects with the aim of empowering every customer’s life and
business in the rapidly changing world.
Ms. Kattiya noted in closing, “In
addition to business growth, KBank’s mission
is to drive society and the Thai economy forward in a sustainable manner. The
Bank continues to focus on adoption of technology, innovations, and synergies with business partners both at home and
abroad, to empower every customer’s life and business. To this end, our efforts
are focused on offering suitable products and services to customers; improving
services for an enhanced customer experience; and promoting financial inclusion
in the commercial banking system for the general public through funding sources
and liquidity enhancement, along with provision of financial literacy to retail
and business customers in support of their vigorous growth. In addition, we
continue to adopt a proactive approach in assisting our customers affected by the
uneven economic recovery through the Bank’s various channels. We also embrace
ESG aspirations with the aim of becoming the ESG leader among banks in
Southeast Asia, leading Thai customers and businesses to move towards a
sustainable economy together.
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