Oct 31, 2009 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX News Network) --

Bangkok Bank plans to move forward with its business expansion in China with the launch of a local operation in December, according to executive chairman Kosit Panpiemras.

The bank is scheduled to open a local banking business on the mainland in December after receiving the business licence from the Beijing government in August. It will be operated by Bangkok Bank China Ltd.

Bangkok Bank has been in business in China since 1985 and currently operates branches in Shanghai, Beijing, Fujian and Guangdong. The branches, starting with the Shanghai operation, will be upgraded to offer more services.

Mr Kosit said the bank's expansion in China was a response to the country's high growth potential with gross domestic product growth of 8 percent this year despite the global recession.

Businesses around the world need to adjust their strategies to cope with the changes in both the Chinese and global environments, he added.

Mr Kosit said the bank would support local customers for direct investment in China rather than merely trading in order to increase the business potential of Thai operators. The strategy would help clients deal with strong competition and also reduce foreign-exchange risk.

"Under the business strategy, we would change our position from China's competitor to the country's partner or supply chain for Chinese businesses. The partnership strategy would be a win-win situation for both countries," he said.

Strong growth in China would support Asian economies including Thailand. The bank expects Thai GDP to expand by 3 percent in 2010, mainly driven by government investment. However, it predicted the country's economy would contract by around 3 percent this year, which would affect BBL's loan growth.

Mr Kosit said the bank expected to see flat loan growth this year against an initial growth target of 3 percent to 5 percent.

While loan approvals have been good, he said, disbursements have been sluggish as clients are being very cautious about new investment or expansion.

"Now, we expect to see zero loan growth for the full year, as improving loan demand in the fourth quarter will be supported by an economic pickup," he said.

BBL, Thailand's largest bank in terms of asset size, would show positive loan growth in next year as Thai GDP expansion resumes. The bank is now working on its 2010 business plan but wants to see a clearer economic picture before finalising it.

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