Thailand’s Kasikornbank eyes to invest $1 bln in Vietnam till 2027

By Tri Duc
Sun, August 27, 2023 | 10:21 am GMT+7

Thailand's second-biggest lender Kasikornbank (KBank) aims to invest at least $1 billion in Vietnam until 2027 as part of its expansion in Southeast Asia, the bank announced Friday.

The investments will include $735 million in the banking business; $336 million in KVision, its investment arm with a focus on small and medium-sized enterprises (SME) and other potential customers; and $7 million for its tech arm Kasikorn Business Technology (KBTG).

The move is set to enlarge the lender’s workforce in Vietnam from 350 in 2023 to 1,700 in 2027. The bank’s app, KPLUS, has attracted 760,000 customers after a year of debut in Vietnam, matching the firm’s target of 1.3 million users by end-2023 and 8.4 million in 2027.

An office of Kasikornbank in Bangkok. Photo courtesy of Banking Times newspaper.

An office of Kasikornbank in Bangkok. Photo courtesy of Banking Times newspaper.

Kasikornbank attributed the move to the potential of the Vietnamese market, including the growing middle-class and the underdeveloped financial services in rural areas, said Pipit Aneaknithi, president of the bank.

The Thai lender will also focus on digital services and serving SMEs, in line with the bank’s strength as a leading lender for SMEs in Thailand, said executive vice president Chat Luangarpa.

SMEs now account for 97% of all businesses in Vietnam but only 20% of the credit in the economy, the executive added.

Initially, the bank will boost its portfolio for SMEs in Vietnam to $40 million by end-2023, while providing other services for easy credit access such as online loans with quick procedures.

In March, Kasikornbank said it plans to expand its Vietnam operations to 8.4 million customers and outstanding loans of 180 billion baht ($5.22 bln) in 2027. Applauding Vietnam’s economic potential, KBank executive vice president Chat Luangarpa highlighted its attractiveness, including a population of nearly 100 million, government efforts to develop digital financial services, fast growth of the banking industry, ample domestic resources, and others.

In May, the State Bank of Vietnam granted approval for its Ho Chi Minh City Branch’s capital increase of more than 2.5 times to 9.6 billion baht ($285 million). Empowered by this capital expansion, KBank will become one of the 20 largest banks in Vietnam in terms of asset size by 2027. KBank said this capital hike is aimed at supporting expansion via its role as a funding source for business owners, including large corporate customers and retail businesses.

On August 23, Kasikornbank said it is exploring an acquisition deal in Vietnam related to Home Credit Vietnam. Home Credit Vietnam is one of the leading financial services in the country. It is part of Netherlands-headquartered non-bank financial institution Home Credit Group, which is controlled by PPF – the Czech Republic's biggest investment group.

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