TMB banks on niche appeal

TMB Bank believes it has carved out a strong niche in the market even though it is being courted by foreign investors.

“No matter what happens, I believe TMB can live on,” chief executive officer Boontuck Wungcharoen said. “We are moving towards transactional banking excellence by focusing on how to help retail customers lead a better life through the bank’s services and products after succeeding in the role of the leader in making a difference in retail banking,” he told a press briefing.

TMB is a public company, so its shareholders can change at any time, but the firm has value in staying by itself, as manifested by its impressive performance since he took over the helm three years ago, Boontuck said.

The media have played up TMB as one of the local banks that foreign banks want to acquire.

Recently Malaysia-based CIMB Bank was reported as planning to take over the seventh-largest commercial bank, as the Finance Ministry wants to unload its entire 26-per-cent holding in TMB. This has attracted players interested in becoming strategic investors.

Boontuck said he did not worry about whom the bank will be held by because today it has stability, as stakeholders and employees are satisfied with management’s efforts to turn the bank around to a profit-making entity that can start paying dividends. The impressive performance in 2011 was guaranteed by loan growth in all segments, new customers, deposit growth and reduced non-performing loans (NPLs).

This year, its loans grew by 15 per cent against 9 per cent for the overall industry. Unsecured loans were up 26 per cent, wholesale loans up 15 per cent, trade finance up 100 per cent, SME (small and medium-sized enterprise) loans up 16 per cent, small-business loans up 50 per cent and deposits up 9 per cent. Its NPL rate should decline to 5.8 per cent from 6.2 per cent last year.

Thanks to its “Make the Difference” strategy, the bank was able to acquire a million new retail customers, bringing its deposit base to between 4 million and 5 million accounts, of which 2.7 million are active.

The increase in retail depositors, particularly for savings accounts and the innovative “TMB No Fixed” deposit product, ensures the stability of liquidity and a lower cost of funds. Retail customers represent 63 per cent of its deposit base.

The retail, wholesale and SME, especially supply-chain SME, markets will be the key drivers for TMB next year. TMB expects to outperform the industry through transactional banking excellence.

The bank aims to help improve the lives of customers to be more easy and convenient by lowering their costs through transactional banking.

“To customers with greater inflows of money than outflows via transactional banking, we will recommend savings and investment products. On the other hand, for customers with more outflow than inflow, we will offer financing products,” he said. TMB targets its loans to increase by 15 per cent next year, faster than the industry forecast of 12-13 per cent, while deposits are targeted to expand by 15 per cent, faster than the industry’s 5-6 per cent. Its NPL rate is expected to fall further to 4.4 per cent.

The focus on transactional banking will also drive fee income 20 per cent higher in 2012.

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