Asiamoney anniversary interview: Chartsiri Sophonpanich

As the last in a series of interviews to celebrate Asiamoney’s 20th anniversary, the CEO of Bangkok Bank reveals his three key strategic objectives to keep the bank stable and profitable and discover which countries he is most eager to expand in.

  • 29 Jul 2009
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Asiamoney [AM]: Please describe your bank’s strategy and reach in Asia as of 1989 compared with 2009?

Chartsiri Sophonpanich, chief executive, Bangkok Bank [CS]: The late part of 1980s and early 1990s was the decade [of economic development] for Asians and a great driver for prosperity because of the movement of manufacturing facilities from developed economies to many Asian countries.

Bangkok Bank moved along on this basis. We expanded our domestic banking side and increased our branch network, as the retail banking part became increasingly more important. On the other hand, on the business side there has also been evolution in a lot of project finance, corporate banking as well as small and medium-sized customers.

The other side is the international front. We expanded our branch network in the region, adding in China, Vietnam and the Philippines. We used to have a branch in Vietnam before so it was the application for our re-entry into the country.

We also established a representative office in China in the mid-1980s and applied to open a branch in the early 1990s. Many of our local corporates and branch customers are overseas Chinese. They provided the basis of our customer base in the region.

Of course, the Asia financial crisis was a critical point for many financial institutions in Asia and especially in Thailand and that was a very important turning point for subsequent reinforcements and stand-out improvement over the last decade, and some of them are still [improving] on an ongoing basis.

We have focused on developing our business in corporate banking, commercial banking which covers medium-sized customers, small business banking and the other arm is the international banking side. We have also made a lot of effort to improve risk management and the efficiency of our operations to service our branch network as well as establishing 55 to 60 business centres throughout the country.

We still believe our four main areas will be the pillars for our business for a long time to come. The composition might change, and the types of business we conduct might evolve, but these four will continue to be important pillars.

What could change is the products, for example the rise in income could lead to more interest in wealth management products to suit the requirements of consumers, including credit products, whether credit cards or housing loans. Or the corporate banking side, in addition to offering credit facilities we could provide other advisory services in capital markets. Both debt and equity will be an important part of our business conduct.

AM: Your return on equity is about 12% right now, while that of your rivals is higher. Are you happy with that or would you look to increase it?

CS: Of course we would like to get the best return on capital. The most critical is on a sustainable basis, but given the situation we’re facing at this point I think capital preservation and cost containment would be more critical to ensure that we would be able to weather these crises well.

But at the same time we recognise the evolution of change in the financial services world in the way we need to build our skills, capability and infrastructure as well as prepare our people accordingly. These four areas will be a strong part of the overall economy for years to come and we want to improve in all four.

On the business side, our leadership should be second to none. In retail banking, in terms of the deposits and liabilities side of the bank network I’d like to believe we are the best. Of course, we need to strengthen retail credit.

We changed our core banking system three years ago and have put many platforms on top of that including certain internet banking services. And I think the technology side will be an important part that needs to evolve more and more; better efficiency and effectiveness in terms of serving our customers.

AM: What would you describe as the most significant internal and external events in Asia in the past 20 years for your bank’s strategy?

CS: I think the internal reorganisation of the bank in the mid-nineties, continuing until the early part of this decade, formed a strong foundation for [our] ongoing strategy of having four banking units plus the international side. And we streamlined many of our services accordingly, and built many of the operational centres to help our branch network. We put in our IT network to connect all these together.

And externally the Asia crisis was the most significant event. The regional factor since the late 1980s was the movement by the Japanese investment throughout Asia, and subsequently [the movement of] Taiwanese and Koreans has been an important part.

Of course, since the mid-nineties the evolution of the Chinese economy, and to a lesser extent that of India, were also important components for the region and certainly for our customers and ourselves.

AM: In 1989, Japan and the Nikkei were at their peaks while China was still experimenting with economic and financial reform. How have you rebalanced your Japan and China strategies during the past 20 years?

CS: I think we benefited from both evolutions. Thailand has benefited a great deal from foreign investment into the country, whether wholly owned or on a joint-venture basis from Japan and other countries.

On the other hand, you can see that our trade flow with China in and out has increased a great deal since the 1990s and that has led to many cross-border investments as well as intra trade within the region. That has become a very important part of our business support with our customers.

Both have been very important and significant to the country and the bank, and they are important in different ways. The FDI [foreign direct investment] up until now has been more by the Japanese, but as we move on we could see increasing levels by the Chinese. In terms of trade flows there has been a significant increase from China and also its influence in the region. Both are critical. I don’t think you can separate one from the other.

AM: Is your business with India growing?

CS: Yes, but it’s not as pronounced as with China or Japan. Some of our larger customer groups are from India, but in terms of the direct impact it’s been to a lesser extent than China or Japan.

AM: What would you like your bank’s position to be in Asia in 20 years’ time?

CS: It’s very difficult to predict where we’ll be in 20 years’ time. But what we’d like to see happening is Bangkok Bank being relevant, at the forefront of our customers’ minds and in a strong leadership position.

We would like to be in the leader especially in Thailand and in [selected countries] in the region. In Thailand we provide to all types of customers and the four areas we discussed are a strong concentration for us. We will look at certain types of business, especially cross-border investment and trade finance.

AM: Would you like to increase the proportion of international revenue flows?

CS: I’ve no particular target in mind. Currently the international portion makes up 15% to 20%. It’s too early to say at this time whether that would change.

However, we would like to have a good footprint in many Asian countries, especially with the growing economies such as China, India, Indonesia and Vietnam. We are already in 12 countries, though, and they provide a strong foundation for us to deepen further. However, we’re not in India, so we need to explore that further.

We have business in Laos and Vietnam. And in 20 years we think these businesses will evolve and Indochina is a strong focus we would have.

AM: Will the financial crises impacting the world lead to fundamental changes in the way finance is conducted in Asia?

CS: Ongoing global events will lead to many changes in the structure of regulations, so we will have to watch and follow these closely.

But the crisis in the late nineties meant that many changes had already taken place with regard to the regulation of financial services. They provided a good basis to the banking system in the region and in Thailand and the dialogue between central bankers and commercial bankers has been good and pragmatic and led to sensible changes as well as raising standards over a period of time and that’s of high value to the system.

Given the situation around the world I think that we’ll need further changes in financial services in Thailand. There’ll be increased sophistication in services provided, but there could also be further consolidation taking place. There are 15 banks currently. The number has been much reduced as a result of the late 1990s. However, we have no plans [to consolidate] at this point.

AM: If you could change one thing about your bank’s regional development in the past 20 years, what would it be?

CS: I think if anything it would be that our portfolio allocation could have been changed more. Some of the components are fine, while in some other areas and certain retail areas we could do a bit more. But I think we’re moving on. In terms of certain retail credit we could strengthen that further, but for branch distribution and access that has been quite strong.

AM: What is your favorite Asian holiday destination?

CS: I enjoy different countries in Asia: Japan, China, Indonesia, they are all different with different cultures and long histories. They are very dynamic.

AM: You are buying an investment property for your children in Asia this year with a 20-year view. Where will it be and why?

CS: I’m not really an expert on the property side, but I’d expect the Indian subcontinent should offer opportunity because of the potential growth from where they are today.

AM: What’s your favourite Asian food?

CS: I enjoy Chinese, Japanese, Korean and even western food. I like them all.

AM: What would be your ideal Asian investment for your family?

CS: That’s a difficult one. Looking back, the high technology area has been quite an important part for the last decade, so I think environmental-related businesses and health-related businesses will be an important part for the next 20 years.

AM: What is your favourite book or movie set in or about Asia?

CS: Films today offer lots of different dimensions andI enjoy watching many different types. Slumdog Millionaire is one example.

  • 29 Jul 2009

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Oct 2016
1 Citi 41,733.81 194 9.42%
2 HSBC 40,945.92 235 9.24%
3 JPMorgan 37,214.87 151 8.40%
4 Bank of America Merrill Lynch 29,284.07 123 6.61%
5 Deutsche Bank 20,416.10 78 4.61%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 JPMorgan 13,268.07 33 6.30%
2 Bank of America Merrill Lynch 11,627.56 29 5.52%
3 Citi 11,610.06 30 5.52%
4 HSBC 10,091.34 29 4.79%
5 Santander 9,533.17 25 4.53%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 Citi 13,617.40 57 11.05%
2 JPMorgan 12,607.77 55 10.23%
3 HSBC 9,327.72 50 7.57%
4 Barclays 8,643.78 30 7.02%
5 Bank of America Merrill Lynch 6,561.15 18 5.32%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 UniCredit 3,966.12 27 13.01%
2 SG Corporate & Investment Banking 2,805.90 16 9.20%
3 ING 2,549.27 20 8.36%
4 Citi 2,526.98 15 8.29%
5 HSBC 1,663.71 16 5.46%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 19 Oct 2016
1 AXIS Bank 5,944.45 123 18.53%
2 HDFC Bank 3,792.05 100 11.82%
3 Trust Investment Advisors 3,390.86 145 10.57%
4 Standard Chartered Bank 2,299.63 31 7.17%
5 ICICI Bank 1,894.86 51 5.91%