President and chief executive officer Noriaki Goto said yesterday that Krungsri’s three-year business plan for 2015-17 was focused on three key strategic themes: first, to grow assets; second, to increase non-interest income; and third, to reduce the cost of funding.

Thailand’s fifth-largest bank reported total assets of Bt1.7 trillion at the end of last year.

Its BIS (Bank for International Settlements) capital-adequacy ratio last year fell to 13.6 per cent from 14.7 per cent in 2014, as the bank had redeemed sub-debt worth Bt20 billion, leaving its Tier 2 capital ratio at 1.6 per cent.

Krungsri’s chief financial officer, Duangdao Wongpanitkrit, added that on the basis of Bt10 billion worth of sub-debt issuance equating to an additional 0.75 per cent in capital, the bank’s Tier 2 capital ratio would stand at 2.35 per cent after this year’s planned issuance.

The Bt10-billion debt issuance would also lift its capital-adequacy ratio to 15.95 per cent.

Under the three-year plan, Krungsri wants to expand its assets, especially in corporate and commercial loans, Goto said.

Thai corporates, Japanese companies and multinationals are the bank’s focus, he said, pointing out that the economic slowdown might not support loan growth among small and medium-sized enterprises. Krungsri’s SME lending this year is expected to grow by just 3 per cent, while retail and corporate loans are expected to expand by 7-7.5 per cent and 6 per cent respectively.

The economic slowdown over the past two years has affected its loan-growth target, and resulted in single-digit asset growth in the period, he added.

Excluding asset transfers from Bank of Tokyo-Mitsubishi UFJ (BTMU), Krungsri’s assets last year grew by 4.7 per cent.

The bank this year targets loan growth of 5-6 per cent, and 5 per cent in 2017, its president said.

Goto said several other Thai banks had also been focusing on the corporate sector, and the fierce competition in the sector, plus the low yield on corporate lending, meant that Krungsri’s net interest margin this year should stay at the current level of 3.7 per cent, against 4.15 per cent last year.

Therefore, the bank has to manage its funding costs by focusing on increasing CASA (current account and savings account) business, he added.

The bank this year aims to become a top-tier financial group in Asean by expanding its network and customer base for both retail and corporate customers, especially in CLMV countries (Cambodia, Laos, Myanmar and Vietnam), Goto explained.

Krungsri currently has a joint-venture company – Krungsri Leasing Services – in Laos, operating an auto-loan and personal-finance business, and a representative office in Myanmar.

For the rest of this year, the bank will continue to explore opportunities in Vietnam by leveraging BTMU’s presence there.BTMU holds a 20-per-cent stake in the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank).

Krungsri is also interested in consumer-finance business in the Vietnamese market, including auto loans.

Early this year, Krungsri signed an agreement to acquire Hattha Kaksekar, the fourth-largest microfinance institution in Cambodia.

The transaction is yet to be completed, as Krungsri will first propose the matter for shareholder approval at its annual general meeting, Goto added.

He also said that while the bank was closely monitoring digital banking and the change in consumer behaviour in using financial services, physical-branch expansion was still a priority as the number of Krungsri branches around the country was still well behind the numbers operated by each of the Kingdom’s top four banks.

Krungsri has 636 branches, while the top four players all have more than 1,000.

The bank will add 30 new branches this year, and 700 new automated teller machines.

Goto said that in its next three-year plan (2018-20), Krungsri might, however, scale down its branch expansion and further embrace digital banking.

It has allocated a budget for studying the introduction of financial technology, he added.

The committee has already approved CAT’s request to upgrade this same band to 4G. Both CAT and DTAC needed the NBTC’s approval to upgrade the band jointly.

Sanphachai Huvatanon, acting president of CAT, said the state agency would meet with DTAC on Monday to discuss the upgrade plan.

CAT is asking DTAC to install the 4G network for CAT to wholesale bandwidth capacity to DTAC and other operators to offer services.

DTAC currently uses 15MHz out of 25MHz of the lower band of 1,800MHz granted by CAT to provide 4G.

The telecom committee also ordered all mobile virtual network operators (MVNOs) to follow the NBTC’s regulations strictly to register all prepaid users as part of the government’s national-security policy.

Of the 39 licensed MVNOs, only about 10 are active. Of 99 million mobile-phone numbers, 80 million are for prepaid users.

The company will recruit 1,000 new staff every year over the next five years. McThai employs 9,000 people now.

Hester Chew, chairman of the executive committee and chief executive of McThai, said the company would invest at least Bt1 billion annually to open between 20 and 25 new McDonald’s restaurants in each of the next five years.

The target is to double last year’s sales figures by 2020.

Thailand now has the third-highest number of McDonald’s stores in Asean, behind the Philippines and Malaysia.

The first McDonald’s in the Philippines opened in 1981, and now there are about 600 operated by its local licensee in that country.

In Malaysia, McDonald’s now has 300 restaurants after the first store was opened by its licensee on Jalan Bukit Bintang in Kuala Lumpur in 1982.

Under sub-licensing agreements, the Philippine and Malaysian operators have a policy of opening new McDonald’s restaurants rapidly, at 30-40 and 20-30 stores per year respectively. The aim is to maintain economy of scale and to manage their costs better.

“In Thailand, McDonald’s has operated our quick-service restaurant business for 31 years since the first store opened in 1985 at Amarin Plaza on Ratchaprasong Intersection,” Chew said.

He added that Thailand still had tremendous opportunity for growth and further expansion of new McDonald’s stores.

“We expect to grow steadily by double digits every year. Our key marketing strategy is to be a customer-centric organisation,” he said.

Chew said McThai invested about Bt600 million last year, of which Bt500 million was for the opening of 17 new stores, and the rest on upgrading its information-technology system and renovation of existing restaurants.

“We plan to invest more than Bt900 million to open 25 new McDonald’s stores this year. Half of the new McDonald’s restaurants to be opened this year will be drive-through outlets,” he said.

“We aim to grow our sales by between 16 and 18 per cent this year, up from single-digit growth at between 8 and 9 per cent posted last year.”

He said the company expected overall business performance to get better beginning in the third quarter of this year driven by a more stable economy, greater consumer confidence, the government’s expenditure on various infrastructure projects, and measures to support small and medium-sized enterprises.

The only challenging factor this year will be the global economic uncertainty, which might affect Thailand’s tourism and export sectors.

McThai currently operates 227 McDonald’s restaurants in Thailand, of which 170 are in Greater Bangkok. Four new stores have been opened since the beginning of this year, at Suanlum Night Bazaar Ratchada in Bangkok, Burirum Castle in Buri Ram, Big C Lopburi, and the PTT petrol station in Nakhon Chaisi district of Nakhon Pathom.

Petcharat Uthaisang, chief marketing officer of McThai, said more than 60 per cent of walk-in customers at quick-service restaurants were impulse buyers. Between 40 and 50 per cent of customers at McDonald’s restaurants are students and white-collar workers aged between 20 and 29.

Key factors influencing their buying decision are cleanliness of products, good experience when visiting the store, value for money, and menu variety.

“We have strategically expanded into Web delivery and mobile applications to acquire new customers. Currently, home delivery contributes about 15 per cent of overall sales at McThai. We expect that contribution to increase to about 20 per cent by 2020,” Petcharat said.

According to Kasikorn Research Centre, Thailand’s overall restaurant market was worth between Bt375 billion and Bt385 billion last year, up by 4-6.8 per cent from 2014. Of that, between Bt108 billion and Bt110 billion worth was chain restaurants, which recorded growth of 6.9-8.9 per cent last year compared with 2014.

In an interview with The Brunei Times recently, Sanya Saengboon, managing director and general manager of Al-Meroz Hotel in Thailand, said the hotel has partnered up with a number of travel agents in Brunei to attract more Muslim visitors from Brunei.

He said the hotel is providing facilities that are designed to ensure the comfort and well-being of both Muslim and non-Muslim guests.

“All meals in our restaurants are halal-certified (by the Thailand government) and alcoholic drinks are prohibited,” Sanya said.

The general manager also invites Bruneian entrepreneurs who are interested to have joint ventures in Thailand to work with the hotel and cooperate in the area of providing halal meals to the hotel’s clients.

“Brunei has halal products. We will mostly welcome Bruneian entrepreneurs who are interested to partner with us,” said Sanya.

Brunei and Thailand should bank on the growing number of Muslims in the world which is an opportunity to develop one another’s tourism industry, he said.

“Both countries can cooperate with one another in terms of halal product and service marketing,” said Sanya.

The Brunei government can also cooperate with the hotel in terms of human resource management, he added.

“Over 60 per cent of our staff are Muslims who have been trained on Islamic dress code. Not only Bruneians can become our partners, but we are also welcoming Bruneians to work here too.”

Sanya said the restaurant in the hotel offers Halal-certified cuisine in an alcohol-free environment.

The restaurant’s staff are also trained to operate and prepare food according to Islamic laws.

According to information from a booklet, the hotel is located with easy access to Suvarnabhumi Airport and the city centre.

It is also situated close to The Foundation of Islamic Centre of Thailand, which runs religious services and offers guidance to the Muslim community in Thailand.

The hotel has been created with a clear vision to provide Muslim and non-Muslim guests with the best traditions of the Islamic way of living.

Through the technology, it looks to increase coverage, speed upgrade, and use the latest indoor technologies to become Thailand’s leading mobile internet operator.

“Dtac plans to use the latest base station technology to upgrade Super 4G networks and improve performance. Ericsson will install its multi-standard radio base station, the RBS 6000, and latest Radio Dot System, which addresses the requirement of reliable mobility and performance in challenging indoor environments in urban areas,” said Prathet Tankuranun, chief technology officer of Dtac.

“This deployment will help Dtac achieve its goal to improve 4G coverage and performance inside buildings, shopping malls, condominiums, and residences with high congestion by the middle of this year.”

Ericsson is the leader in high-speed 4G/LTE market and ranked first for handling global 4G/LTE traffic, with 40 per cent of the world’s mobile traffic being carried over Ericsson networks. Ericsson has delivered more than 220 network solutions worldwide.

Also increasing 4G service expansion on 1800 MHz and 2100 MHz. In mid-year Dtac will increase 4G spectrum on 1800 MHz to 20 MHZ and is very confident that our customer will be able to use 4G nationwide in quarter 3. Ericsson as part of a 5-year network enhancement contract between Telenor Group and Ericsson, covering Thailand, Bangladesh, and Myanmar. Telenor Group’s global partnership with Ericsson enables Dtac, to access latest technology and use it to enhance its services to meet customer needs.

Dtac expands and enhances the quality of Dtac’s network with Super 4G on 1800 Mhz from 5MHz to 15MHz which 3 times faster the speed ahead of 4G, in pursuing the company’s strategy of delivering the largest 4G bandwidth on the single network, which operates on the 1800 MHz to provide Dtac customers with the expanded and enhanced Super 4G experience, expected to be done by midyear.

He also said that Jas Mobile Broadband, the other successful bidder in the hotly contested cellular spectrum auction held late last year, had informed the NBTC that it would definitely start the payments before the March 21 deadline.

Today, True is scheduled to sign letters of guarantee facilities for the 900MHz licence with six banks: Bangkok Bank, Siam Commercial Bank, Kasikornbank, Krungthai Bank, Kiatnakin Bank and Industrial and Commercial Bank of China.

Yesterday, the company reported net profit of Bt4.4 billion in 2015 compared with Bt1.3 billion in 2014. Consolidated service revenue last year was Bt74.8 billion, up 10.8 per cent from 2014.

The improvement in net profit was driven by a 58-per-cent increase in operating profits together with a significant decline in interest expenses and depreciation on the second-generation cellular system.

For 2016, the company targets growth in consolidated service revenue of 13-17 per cent and 17-20 per cent for EBITDA (earnings before interest, taxes, depreciation and amortisation). Revenue from True’s mobile unit grew by 17.3 per cent in 2015 while the other major players in the industry had a combined growth rate of only 0.3 per cent.

True reported that its mobile-phone unit TrueMove H had 19.1 million subscribers by the end of last year. True Online, its broadband service had reached 2.4 million households, while the TrueVisions pay-TV service expanded its customer base to 3.1 million.