Thai Commerce Ministry unlocks commercial banking

[webfact]

Commerce Ministry unlocks commercial banking

BANGKOK, 22 February 2016 (NNT) - Business Development Department Deputy Director General Rattana Thianwisitthakul disclosed that the Commerce Ministry will soon loosening foreign investment regulation in four businesses: commercial banks, representative offices of foreign banks, life insurance and non-life insurance, which are the four business types in the annexes for List 3 of the Foreign Business Act 2009.

Once the regulations are officially published in the Royal Gazette, foreign investors in the mentioned four segments will no longer have to request for foreign business operation license from the department. Thai entrepreneurs are deemed to be more ready for business competition om these fields.

The Deputy Director General of the Business Development Department added that there are currently 20 commercial banking businesses that have received foreign business licenses from the department.


-- NNT 2016-02-22

[Sydebolle]

So our prayers for some decent banking service within the parameter of the 21st century were heard and should be around the corner anytime soon then?

Good, because I've had it with queueing, last century software telebanking, endless photocopying and the weekly recurring "no have" asking for change which I need to run my end-consumer business.

[Gsxrnz]

Don't hold your breath. There's no way they'll let foreign banks anywhere near the retail end of the market.

This announcement is about corporate banking - they're hoping for some offshore corporates and merchant banks to open some offices here so they can have a go at fleecing them.

[Srikcir]

the Commerce Ministry will soon loosening foreign investment regulation in four businesses

Wouldn't this have to happen whatever the excuse? With the ASEAN Community now active, it stands to follow that all ASEAN-based financial institutions will have open access to Thailand's financial markets just as European nations have throughout the EU.

[Pib]

Don't hold your breath. There's no way they'll let foreign banks anywhere near the retail end of the market.

This announcement is about corporate banking - they're hoping for some offshore corporates and merchant banks to open some offices here so they can have a go at fleecing them.

Amen to that. The govt will only allow a dipping of the toes into the Thailand financial sector waters, with promises of being allowed to swim freely "sometime in the future." And sometime in the future in Thai time could approach the time when the sun is suppose to swell into a red giant and engulf the Earth.

[Time Traveller]

Don't hold your breath. There's no way they'll let foreign banks anywhere near the retail end of the market.

This announcement is about corporate banking - they're hoping for some offshore corporates and merchant banks to open some offices here so they can have a go at fleecing them.

Amen to that. The govt will only allow a dipping of the toes into the Thailand financial sector waters, with promises of being allowed to swim freely "sometime in the future." And sometime in the future in Thai time could approach the time when the sun is suppose to swell into a red giant and engulf the Earth.

You might want check the facts before posting. Foreign commercial banks are already operating in Thailand, and have for a long time. This change is only about not requiring them to have a foreign business license.

[Pib]

Don't hold your breath. There's no way they'll let foreign banks anywhere near the retail end of the market.

This announcement is about corporate banking - they're hoping for some offshore corporates and merchant banks to open some offices here so they can have a go at fleecing them.

Amen to that. The govt will only allow a dipping of the toes into the Thailand financial sector waters, with promises of being allowed to swim freely "sometime in the future." And sometime in the future in Thai time could approach the time when the sun is suppose to swell into a red giant and engulf the Earth.

You might want check the facts before posting. Foreign commercial banks are already operating in Thailand, and have for a long time. This change is only about not requiring them to have a foreign business license.

Yes, I know...primarily banks for some cooperate customers. But in terms of banking for retail customers/Somchai on the street, Thai banks like Bangkok Bank, Kaiskorn Bank, Krungsri Bank, Siam Commerical Bank, Thai Military Bank, Thanachart Bank, KrungThai Bank, etc., rule that retail market and jealously guard it through govt influence.

[khunken]

Don't hold your breath. There's no way they'll let foreign banks anywhere near the retail end of the market.

This announcement is about corporate banking - they're hoping for some offshore corporates and merchant banks to open some offices here so they can have a go at fleecing them.

Amen to that. The govt will only allow a dipping of the toes into the Thailand financial sector waters, with promises of being allowed to swim freely "sometime in the future." And sometime in the future in Thai time could approach the time when the sun is suppose to swell into a red giant and engulf the Earth.

You might want check the facts before posting. Foreign commercial banks are already operating in Thailand, and have for a long time. This change is only about not requiring them to have a foreign business license.

Yes, I know...primarily banks for some cooperate customers. But in terms of banking for retail customers/Somchai on the street, Thai banks like Bangkok Bank, Kaiskorn Bank, Krungsri Bank, Siam Commerical Bank, Thai Military Bank, Thanachart Bank, KrungThai Bank, etc., rule that retail market and jealously guard it through govt influence.

Not totally true.

Krungsri is a retail bank and has been foreign owned since 2013 - currently owned by BTMU.

Standard Chartered, another retail bank has been in operation here for many years having purchased Nakornthon Bank.

CIMB, another foreign owned retail bank has been in operation for years.

Time Traveller is quite correct.

[Pib]

Interesting. I will admit there is some retail presence like with Standard Chartered and CIMB and even CitiBank to name one more but those two have a very small piece of the retail pie in Thailand. For example, although I read quite a few TV posts regarding Citibank which can give the impression of Citibank being a major player in Thailand, in fact, Citibank only has 3 branches and 5 ATM locations in Thailand and they are all in Bangkok according to their website...a very minor presence. And Standard Chartered has around 20 branches in Bangkok and one in Pattaya as far as I can see from their website.

Now CIMB does have fair sized retail presence in Thailand. Krungsri has huge presence throughout Thailand and I was surprised to see Krungsri as being foreign owned, but it appears a controlling interest by BTMU occurred in 2013...see this webpage for more info.

So based on that ownership change with Krungsri that i wasn't aware of I stand corrected and retract my statement about not until the sun swells to a red giant... Will just have to wait and see just how "unlocked" going forward from now the financial industry really becomes in Thailand.

[TallGuyJohninBKK]

As for CIMB Thai, I believe I read here lately that they're planning (and in the process of) significantly downscaling their retail branch operations, and focusing their remaining fewer locations instead on high value customers. The ordinary folks, like most of us, would end up being served by planned joint service locations with AIS shops, if I recall the prior reports correctly.

I've had a CIMB branch near my home in central BKK that's been open and operating for years, near one of the biggest intersections in the city. Just lately, I went by there and noticed the branch is now gone, and the location closed up. Believe the CIMB ATM that had been there is shuttered as well.

CIMB in recent years has had some decent rates on fixed term accounts, although they leaned more toward Thai residents and those with work permits. But if they follow through with their joint AIS shops plan, it will be interesting trying to see how the AIS/bank staff there will handle one of us if we pop in asking about opening a new fixed term account.

[fletchsmile]

Amen to that. The govt will only allow a dipping of the toes into the Thailand financial sector waters, with promises of being allowed to swim freely "sometime in the future." And sometime in the future in Thai time could approach the time when the sun is suppose to swell into a red giant and engulf the Earth.

You might want check the facts before posting. Foreign commercial banks are already operating in Thailand, and have for a long time. This change is only about not requiring them to have a foreign business license.

Yes, I know...primarily banks for some cooperate customers. But in terms of banking for retail customers/Somchai on the street, Thai banks like Bangkok Bank, Kaiskorn Bank, Krungsri Bank, Siam Commerical Bank, Thai Military Bank, Thanachart Bank, KrungThai Bank, etc., rule that retail market and jealously guard it through govt influence.

Not totally true.

Krungsri is a retail bank and has been foreign owned since 2013 - currently owned by BTMU.

Standard Chartered, another retail bank has been in operation here for many years having purchased Nakornthon Bank.

CIMB, another foreign owned retail bank has been in operation for years.

Time Traveller is quite correct.

Agree that these foreign banks have locally owned Thai subsidiaries. UOB being another one.

It's far from a level playing field though. Just two examples:

1) In the case of StanChart and UOB once they acquired their Thai subsidiaries they were given 10 years within which they could issue more shares to the parent company to bring in equity capital. So the parent company had a 10 year window they could increase equity to finance their business activities. After that 10 years expired they were no longer allowed to issue new shares to the parent to bring in more equity capital, without reducing their shareholdings back below the 49% level. Imagine the constraints that puts on strategic planning and business activities. Remembering of course banks need to set aside capital for any loans etc. I believe CIMB Thai also has restrictions.

2) The Big4 banks already have very large branch networks. It's too late for Stan Chart, UOB, CIMB Thai to ever catch up on that score, even if they wanted to on the retail side. That's one of the reasons why StanChart for example focuses only on Greater Bangkok, with a few satellite branches elsewhere.

Cheers

Fletcch

Edited February 24, 2016 by fletchsmile

[fletchsmile]

As for CIMB Thai, I believe I read here lately that they're planning (and in the process of) significantly downscaling their retail branch operations, and focusing their remaining fewer locations instead on high value customers. The ordinary folks, like most of us, would end up being served by planned joint service locations with AIS shops, if I recall the prior reports correctly.

I've had a CIMB branch near my home in central BKK that's been open and operating for years, near one of the biggest intersections in the city. Just lately, I went by there and noticed the branch is now gone, and the location closed up. Believe the CIMB ATM that had been there is shuttered as well.

CIMB in recent years has had some decent rates on fixed term accounts, although they leaned more toward Thai residents and those with work permits. But if they follow through with their joint AIS shops plan, it will be interesting trying to see how the AIS/bank staff there will handle one of us if we pop in asking about opening a new fixed term account.

They're realising they simply can't compete on volumes. So refocusing their strategy, and reducing number of branches to try and compete in other ways.

HSBC is another example. At the point where they were finally likely to be allowed to open more branches - up to 20 - when Financial Sector Master Plan II was being touted - they decided the economics didn't make sense. With the constraints for them here and more limited scope of what they were allowed to do in Thailand they thought it makes better sense to just take that capital from Thailand and apply it elsewhere in the Group, in countries where they can better compete.