Mr. Kris Chantanotoke, Chief Executive Officer of the Siam Commercial Bank Public Company Limited (SCB), made a comment regarding the economic situation in Thailand and trend of commercial banks amid fast-pace digital transformation.
The CEO stated that the company can maintain and cap its non-performing loans (NPL) at about 3.31% despite facing the volatility in the Thai economy. Additionally, the company also plans to downsize its organization, closing the number of its current branches from 651 to about 500 branches.
The CEO also stated that ever since he was appointed to this position on August 1, 2022, his primary goals for SCB are to build highest confidence among the customer while turning the company to a leading wealth management company, advance the digital banks transformation that maintain the customer’s top satisfaction, and find a balance between institutional business and retail business customers.
Mr. Kris has accomplished several notable successes in recent years. First, he transformed the company into Thailand’s major commercial bank that generated a double-digit Return on Equity (ROE), becoming one of the first leading banks to accomplish this despite facing the economic challenges from the COVID-19 pandemic. Furthermore, the ROE also continues to maintain at the double-digit rate.
Second, he reduced SCB’s cost to income ratio to around 30%, surpassing his original goal of below 40%. This is also reflecting the operational efficiency as the rate continues to decline. Third, he significantly increased the company’s digital revenue from 6 – 7% to reach the target of 25%, emphasizing its digital bank transformation. Finally, he positioned the company as the market leader in green loans and sustainability-linked loans, highlighting its leadership continually.
However, there are still two important goals that SCB plans to accomplish within Mr. Kris’ four-year term. First is to become a leading wealth management company to create confidence and address the demand of ultra-high-net-worth individuals. The second is to increase the net promoter score of customers who use SCB as their main bank to the highest rank. The company has considered these two goals as strategic missions that the company must accomplish or reach the closest milestone.
Mr. Kris stated that the current economy is facing various challenges. For example, the uncertainty in the global trade policy has pressured Thailand’s export industry in the second half of the year, while the domestic market faces the large import of Chinese products. The access to real loans is still limited due to high household debt, low-quality loans, and the declining consumption. Moreover, the slow down in the tourism sector, especially among Chinese tourists, has affected various businesses.
SCB has to adjust significantly, especially to prepare for the arrival of virtual banks and the utilization of AI technology, which is a challenge to the entire company. To address this, the company has prepared key measures by developing financial assets that are suitable and sustainable, while forming a long term relationship with the customer. Moreover, the bank must exercise greater caution when granting loans and provide thoughtful financial advice that aligns with current market conditions.
