KTB boss outlines 7-year plan to be top bank

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KTB boss outlines 7-year plan to be top bank
Sucheera Pinijparakarn
The Nation


Vorapak

BANGKOK: -- State owned commercial bank Krungthai Bank has outlined a seven-year business plan - what it calls its three summits - with the goal of becoming top in terms of profitability while being the best place to work.

KTB is the country's largest in terms of size by assets, but its profitability is fourth, behind Bangkok Bank, Siam Commercial Bank and Kasikornbank.

In the first six months of the year, KTB reported a net profit of Bt15.91 billion, BBL reported Bt17.99 billion, SCB Bt27.85 billion and KBank Bt23.67 billion.

KTB president Vorapak Tanya-wong had set a three-year plan (2013-2015) with the target of tripling the net profit within that period and pushed the transformation plan to help boost work efficiency.

After implementing the transformation over the past year, Vorapak, who has been serving as president for almost two years, acknowledged that the process was the first ladder and there should be second and third ladders to ensure KTB's readiness to be a top-tier bank.

"We have adjusted the three-year plan to a seven-year one by including transformation into the three summits and people is the key element," he said. "So, we will foster employee engagement together with the business growth."

Under the seven-year plan (2015-2021), the first summit is the foundation, the second is closing the gap and the third is the best place to work.

Transformation is in the first summit, and Vorapak said he had made the right decision in moving it forward because employees had high expectations of him as the new president and had an open mind in terms of following the new vision.

Under increasing work and employee efficiency of the transformation mantra, the bank set up a loan factory for retail banking and for small and medium-sized enterprises by centralising its loan-approval system from branches and underwriting its credit policy to tackle bad debt.

"We used to have 1,700 people from 80 branches to approve retail loans but the loan factory requires only 300 people, with the remaining 1,400 focusing on sales and services for customers instead," the president said. "The underwriting policy helps the bank screen credit applications, causing the rejection rate to rise to 30 per cent, which helps improve non-performing loans."

Vorapak said the loan factory had been implemented for medium-sized enterprises with a credit line of Bt20 million to Bt100 million, small-sized enterprises with a credit line of Bt11 million to Bt20 million and micro enterprises with a credit line of Bt1 million to Bt10 million.

He said the base foundation was most important as it involved people, which was the big challenge for him as every change had both a positive and a negative impact on people.

The bank has terminated the annual 7.5-per-cent-salary hike for all employees, following the rule for state-owned enterprises, and implemented the key performance indicator base to determine who gets promoted and an increased salary.

"Good-practice employees should be shared with others to motivate the under-developed employees," he said."However, almost all employees at KTB are quality people, which is why the bank is making the best runway for them to boost efficiency."

He said the transformation process also made the bank develop and attract high-potential employees and they would be its executives one day. This would lead to employee engagement, with the goal to turn KTB into the best place to work by 2021.

The second summit, he said, would result in KTB focusing on closing the profitability gap with its three main rivals between 2016-18, with the goal to become top tier by 2018.

Net new growth must be in line with the other major banks and KTB's market share must be improved in housing loans and SMEs.

He said retail and SMEs were the focus because of the higher yields compared with the lending to the government and the corporations.

"We intend to drive the net interest margin above 3 per cent next year, from around 2.7 per cent currently," he said. "We have to improve our product capability in the weak areas such as post-finance to home buyers of developers, who are pre-finance customers.

"We will focus on cash management and alternative banking channels such as digital banking to increase fee income."

Vorapak said KTB would lower the exposure on creditors that use huge balance sheets because the bank had no plan to increase its capital. Its capital adequacy ratio was 15 per cent.

KTB's net profit next year could surpass Bangkok Bank if the latter did not speed up, while KTB's net new housing loans could beat SCB, the market leader in housing loans.

KTB is 2nd in housing loans, with outstanding loans of Bt300 billion, while SCB has outstanding loans of Bt500 billion.

Based on current growth, Vorapak predicted KTB would show better bottom line and NPL results next year.

Source: http://www.nationmultimedia.com/business/KTB-boss-outlines-7-year-plan-to-be-top-bank-30242725.html


-- The Nation 2014-09-08

[Chris Lawrence]

To paraphrase, 'we have just got to screw the customer harder and sweeter'.

Bankers are just below used car salesman on the 'we really care metre'.

[natway09]

Have you seen the blue wave coming out the door of their two massive buildings in lower Sukhumvit at lunch time?

Literally thousands of them, I've often wondered what they all do with the modern banking system being computerized

[bangon04]

""We will focus on cash management "

Good start for a bank..... wish them well