Post-office banking: ktb secures foreign partners

[george]

POST-OFFICE BANKING: KTB secures foreign partners

Published on Oct 24, 2003

Overseas firms will help bank and Krungthai Card invest inThailand Post

Two post-office companies, one Asian and one European, are to jointly invest with Krung Thai Bank (KTB) in Thailand Post Co as part of the bank's two-year plan to become a postal-banking entity.

The Netherlands-based ING Group, which has overseas expertise in the field, will advise the bank on the plan.

The two partners had approached the bank after hearing about the plan during a recent public-offering road show, KTB president Viroj Nualkhair said on Wednesday.

KTB, the country's largest state-owned bank, sold out 3.6 million shares via the public offering on October 9 and 10 to both local and foreign investors as part of its privatisation plan.

Along with the two foreign partners, Krungthai Card (KTC) - the bank's credit card-issuing subsidiary - will also invest in Thailand Post.

"According to the postal-banking plan, KTB will boost its level of retail customers to 60 per cent from the current 30 per cent within two years," Viroj said.

KTB had earlier announced that it would buy a majority interest in Thailand Post - which is currently 100-per-cent owned by the Finance Ministry - and operate a postal-banking service itself.

KTB would thus be a retail banking entity with a vast number of customers derived from the network of post offices across the country. Thailand Post has more than 1,000 outlets, while KTB has 615 branches. Viroj said KTB had already shifted its business strategy from universal banking to retail banking.

KTB will in coming weeks discuss the plan with the Information and Communications Technology Ministry, which supervises the state-owned Thailand Post.

The bank, Viroj added, would undertake its transformation in three phases.

First, the bank, KTC and its foreign partners will buy a majority share in Thailand Post from the Finance Ministry, although Viroj declined to disclose figures.

With ICT Ministry approval, KTB will assess the value of Thailand Post to determine the level of investment needed for the second stage. This assessment will be overseen by the ING Group.

Third, the bank will set out a business plan for Thailand Post.

Viroj said the company's core postal business must be strong enough before KTB would incorporate its banking business.

He said Thailand Post would serve only as the bank's outlets or sales agent, while KTB would still handle banking transactions.

"The key objective of the plan is to expand the bank's customer base," he added.

The plan is expected to involve lower costs compared to opening new branches, as KTB only needs to invest in the necessary technology for its branches, Viroj said.

--THE NATION 2003-10-24

[george]

Three more banks keen to invest in postal firm

Published on Oct 25, 2003

Three more local banks have lined up to court the state-run postal company, Thailand Post.

Information and Communications Technology (ICT) Minister Surapong Suebwonglee said yesterday the Government Savings Bank, the Bank for Agriculture and Agricultural Cooperatives, and a local bank he declined to name, had proposed making strategic investments in the entity.

Krung Thai Bank was the first to woo Thailand Post, which was the postal unit of the Communications Authority of Thailand (CAT), before the CAT was corporatised early this year.

In the same process, the CAT became CAT Telecom.

"We expect to award the strategic partnership deal to the bank with the best offer by the end of this year," Surapong said.

However, no bank will be allowed to take over management of Thailand Post, he added.

"The major role of the partner is to develop its postal and other businesses, instead of controlling it to provide only banking services," he said.

Krung Thai Bank had earlier said it would like to buy a majority stake in Thailand Post - now wholly owned by the Finance Ministry - and operate it as a postal-banking service.

Banks are attracted to Thailand Post's network of over 1,000 post offices, which could offer basic banking products.

The new company is also working to improve its workforce's customer-service capabilities and explore new revenue sources.

Recently, it added a passport-extension service to its 60 over-the-counter services under the Pay at Post umbrella, which has generated Bt100 million in revenue during the first six months of the year - up fivefold from last year.

A telecom industry source said Thailand Post had more sex appeal than its sister organisation, CAT Telecom, due to its lack of serious unsolved problems.

One uncertainty facing CAT Telecom is a possible merger with TOT Corp as part of state telecom policy to combine their strengths and eliminate redundancies.

Telecom Reporters

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