Determined to become the Bank of AEC+3, KASIKORNBANK (KBank) has opened a branch in Ho Chi Minh City – the trade and investment hub of Vietnam – with the aim of linking the trade and investment network within the ASEAN region. The move will upgrade the service provided to local customers via digital platforms in order to capitalize on abounding opportunities in the Vietnamese market. KBank has set targets of 1.2 billion Baht in deposits and 15 billion Baht in loans. Guided by the Regional Digital Banking strategy, KBank aims for a customer base of 8 million within the next five years, while also recruiting more than 500 digital savvy talents to join its workforce and boost its capabilities to accommodate its business expansion in Vietnam.
Mr. Pipit Aneaknithi, KBank President, said that KBank has served Vietnamese customers via its two representative offices in Hanoi and Ho Chi Minh City since 2015. Given its ample business opportunities and strong economy, all eyes are now on Vietnam as a center of investment for the world’s leading firms, including those from Thailand. Vietnam is the only ASEAN country that has enjoyed positive economic growth despite the COVID-19 pandemic. However, the Vietnamese economy was somewhat affected by lockdown measures in the third quarter of this year. Overall, Vietnam’s economy has largely been driven by foreign direct investment (FDI) which remains quite resilient to the pandemic, thus being a boon to exports of major products such as mobile phones and other electronic equipment. Vietnam’s estimated GDP growth is set to be higher than 5 percent. As a result, Vietnam has continually attracted FDI from both Asian and Western countries.
Under these circumstances, KBank has upgraded its representative office in Ho Chi Minh City to the status of an international branch. It is the first KBank branch in Vietnam, and its tenth overseas branch. On November 12, 2021, KBank Ho Chi Minh City branch (HCMC) officially opens its doors under the “Regional Bank of Choice” mission. The move aims to empower all customer groups through digital banking platforms in line with the Regional Digital Banking strategy so as to bolster the Bank’s competitive capabilities. By the end of 2022, the Bank has set targets for the deposits and loans of the HCMC branch at 1.2 billion Baht and 15 billion Baht, respectively. Along with this, its customer base in Vietnam is targeted to total 8 million within the next five years.
As part of its effort to strengthen its presence in the Vietnamese market, KBank is now recruiting for more than 500 positions in Thailand and Ho Chi Minh City to acquire capable personnel with multiple skills. At the same time, the Bank has focused on employee development by bolstering their capabilities through language and technology reskilling. Along with this, the Bank will leverage its strong organizational culture to create financial services for a digital market in sync with the context of the region’s fast-changing business environment.
Business operations of KBank HCMC Branch during the initial phase will focus on corporate lending to Local Large Corporate customers (LLC), primarily to clients in the manufacturing, industrial estate, commercial estate, trading and consumer product sectors. The lending service will mainly be offered to Thai, Chinese, Japanese and South Korean companies wishing to expand their business in Vietnam for international trade and investment. Moreover, KBank HCMC Branch has a target to expand its service provision to local retail customers. This will be achieved by using KBank’s cutting-edge digital and mobile banking technologies to offer deposit and personal loan services. Through a joint investment of KVision, KBank HCMC Branch has teamed with local tech startups to assist in the development of services to specifically meet the needs of local customers, given the fact that the number of internet users in Vietnam amounts to 70 percent of the total population. Doing business in Vietnam, therefore, differs from that in the rest of AEC+3 where KBank emphasizes international business. Presently, world-class fintech companies have expressed interest in forming a partnership with KBank to build an ecosystem for future business expansion in Vietnam, tapping the unbanked customer and working-age population segments that are set to grow going forward. KBank is currently discussing this matter with such fintech firms.
KBank is scheduled to gradually offer digital banking services to allow customers to enter a full-fledged digital banking world via digital lending. A target has been set to extend 1.5 billion Baht in loans by 2022 to 25,000 customers wanting to apply for KBank Biz Loan, or online merchants in need of working capital for business expansion. Additionally, partnerships have been formed with e-commerce platforms, with the aim of enhancing KBank’s business potential in the region with local partners. These include large customer database companies which have a deep understanding of the market, namely IPOS VN., Haravan and KiotViet, which will help deliver services that precisely meet the customers’ needs, plus Sendo, a large e-commerce platform, which will help create financial service solutions for online merchants, thus allowing customers using services with such partners to have easier and faster access to business loans thanks to the transaction data made available by partners. Customers can choose a loan installment payment period of up to 36 months. The maximum loan limit offered is VND100 million, or 150,000 Baht, and the interest rate is only 1.4 percent per month.
Mr. Pipit added that KBank’s business operations in Vietnam are not solely limited to traditional banking but should also expand business opportunities in this new era of financial transactions through the offering of disruptive/digital banking services, as the population of Vietnam includes a large number of younger-generation people who are digital-savvy and have technological readiness. At the same time, Vietnam’s digital ecosystem corresponds to the Bank’s asset-light regional digital expansion strategy which prioritizes business partnerships through investment and joint ventures with technological companies and local startups as well as the offering of cross-border financing to local businesses in Vietnam, taking advantage of the lower funding cost.
Under KBank’s key strategy of becoming “The Bank of AEC+3”, KBank can connect its services through a myriad of channels under its network, including locally incorporated institutions, foreign branches, representative offices and financial institutions that are partnered with the Bank. At present, KBank has an overseas service network that spans 16 countries across AEC+3 and other regions, with more than 84 partners worldwide. With over 1.85 million customers in the region, KBank will continually strive to expand its customer base.