HSBC Thailand Awaits Change In Law To Become Local Retail Bank

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HSBC awaits change in law to become retail bank

By Sucheera Pinijparakarn

The Nation

HSBC Thailand will transform itself from a consumer wealth-asset-management bank into a local retail bank once the law for the Financial Sector Master Plan takes effect.

The law will allow foreign banks to expand to 20 branches and 20 ATM (automated teller machine) networks, as part of the on-going process.

However, HSBC can open two branches this year under a new Financial Sector Master Plan Phase 2 ruling that allows foreign banks to set up two outlets each.

Wichit Phayuhanaveechai, head of personal financial services at HSBC Thailand, said yesterday that the bank was ready to become a retail bank even though the law had not been finalised. The first of the two new branches is expected to open on Soi Thong Lor (Sukhumvit 55) this quarter, helping it to increase its deposit accounts.

When the law takes effect, foreign banks that want to operate in retail banking must set up a locally incorporated subsidiary with an allowance for up to 20 branches and 20 ATMs. Currently, foreign banks are permitted by law to have only one office (branch) in Thailand.

From now, HSBC would have to raise more deposits, targeting its affluent customers.

Recent research showed that the number of affluent people in Asia grew by 25 per cent, the highest rate in the world, due to the improving economy. HSBC's research found that affluent people in Greater Bangkok accounted for 2 per cent of the population, or 65,000. The minimum revenue of affluent Thais is Bt200,000 per person per month. They hold liquid assets of Bt4 million on average.

"Affluent Thais, who are HSBC's target group, should know what HSBC can offer them if they have a deposit account with the bank," Wichit said.

The affluent in the past 18 months have allocated 29 per cent of their total liquid assets to other investment products. Affluent clients want to find a good return on investment, and HSBC has expertise in wealth management. The bank has developed HSBC Premier, a package of personalised wealth management, to lure high-income people to deposit or invest with HSBC.

HSBC Premier clients will invest or deposit at least Bt3 million in bills of exchange (B/E) or other investment products. Premier customers will enjoy expert financial planning and advice offered by relationship managers, online access to their HSBC bank accounts worldwide with free international fund transfers, free international calls to HSBC Premier centres in 46 countries and territories, and additional facilities.

HSBC Thailand aims for 25 per cent of the 65,000 affluent people in Greater Bangkok, up from the current 20 per cent, boosted by the launch of the HSBC Premier package and the opening of the new branch.

"We aim to double our deposit portfolio," Wichit said.

HSBC's deposits last year grew by 25 per cent and accounted for 5 per cent of the deposit market. This year, the bank expects its deposits to grow at the same pace. Total deposits in Thailand as declared by the Bank of Thailand are Bt720 billion, up by 3.59 per cent.

About 90 per cent of the bank's revenue is from consumer asset products and the rest from credit cards, personal loans and mortgages.

-- The Nation 2011-01-05

Related link:

HSBC - open an account online:

http://www.thaivisa.com/hsbc

[Ricardo]

Good news also, for HSBC-Premier's existing international clients, who live here in Thailand, and would like to be better served, I for one look forward to the day when they open their first branch up here in Chiang Mai, and I'd have thought that Pattaya and Phuket should be high up on their list ?

Or is serving one's existing customers properly less-important than gaining new ones ?

[Humphrey Bear]

Having HSBC accounts in Vietnam, Hong Kong and UK, this could be a very good move for me.

However, bearing in mind the debacle of DBS (Development Bank of Singapore) around five years ago, when they had to leave Thailand for economic reasons (I was told), would it be a good move for HSBC?

Could this be another Carlsberg/Chang thing, where the Thais learn all they think they need from the foreign experts, then go their own way, saying 'We can do it better'?

[asiawatcher]

Ditto - simply for banking cash but most of my business is thru HSBC HK and internet (which is exceptional) and not Rama IV so a branch or two around BKK would be good. Go for it!

[Losangels]

However, bearing in mind the debacle of DBS (Development Bank of Singapore) around five years ago, when they had to leave Thailand for economic reasons (I was told), would it be a good move for HSBC?

UOB (United Overseas Bank), a Sigaporean bank has been here a few years with several branches. They are doing alright.

[Guest]

And so is Standard Chartered which bought out the Nakornthon Bank,

[SantiSuk]

Wow - foreign banks are allowed to have up to 20 branches. Major step forward in free trade (not).

Any Thai investor could take over or set up a 10,000+ branch network in the UK. Chinese cultural philosophy shines through again.

[Cnxforever]

<br>Having HSBC accounts in Vietnam, Hong Kong and UK, this could be a very good move for me.<br><br>However, bearing in mind the debacle of DBS (Development Bank of Singapore) around five years ago, when they had to leave Thailand for economic reasons (I was told), would it be a good move for HSBC?<br><br>Could this be another Carlsberg/Chang thing, where the Thais learn all they think they need from the foreign experts, then go their own way, saying 'We can do it better'?<br>

<br><br>It's all about protectionism - Thai Banks could never compete with foreign banks (just think of the "doctored" statements for loans!) - like most other businesses. The way Thai banks are run they would be history within a few years if foreign banks are allowed to operate here at competitive and fair conditions. <br><br>Problem is as long as there is no real competition the people are forced to deal with the protectionism / monopolists and pay the price like in so many other industries in this country as well - mobile phones extortionist fees, car prices higher than in the US or Europe e.g.<br><br>But since politics and big business in Thailand are all one happy family  - no real competition will be allowed  - nothing is going to happen to endanger their iron grip on the money in this country - and the "suckers" that are the Thai people will keep paying the price!<br>

[george]

You can apply for a HSBC account online here:

http://www.thaivisa.com/hsbc