Deutsche Bank expects Thai finance, banking sectors to witness robust growth

Deutsche Bank (DB) anticipates strong potential growth in Thailand’s finance and banking sectors because of a variety of appealing investments and initiatives, Alexander von zur Muehlen, chief executive for Asia Pacific and a member of the management board of Deutsche Bank AG, told The Nation.

The growth would also encourage increased cross-border transactions and hedging as Thai businesses expand internationally.

The Germany-based bank is preparing to celebrate its 150th anniversary in the Asia-Pacific region this year.

DB’s services range from corporate banking and investment banking to private banking and asset management across Asia Pacific.

The bank has continued to deepen relations with Thailand despite the Covid situation. It was the first in the country to arrange non-resident onshore THB hedging, which enables non-resident enterprises to access onshore local currency liquidity more efficiently.

The bank has introduced a new payment platform through 2C2P, Southeast Asia’s leading payment platform, to assist its corporate clients in Thailand.

Its corporate customers now find it plain sailing and uncomplicated to collect funds through a range of online banking and non-banking channels, such as mobile payments. 

DB also recently launched PromptPay instant payments for its clients in 
in Thailand, combining this with API technology. The technology enables  to clients to seamlessly integrate payments into their business and treasury processes. 

The bank predicts cross-border services will grow further, witnessing increased banking activities in local and international transactions from Thailand to other overseas markets, higher payment volumes, and increased hedging activity. These underpin high potential growth in Thailand, von zur Muehlen made clear.

“We are deeply connected in local markets around the region,” he said. 

“When many foreign banks talk about Asia, they actually mean China. But we really mean Asia, and our broad footprint throughout the region. Asean markets are crucial for us because of the long-standing economic relationships,” he pointed out.

“Our business in Thailand is very balanced in terms of activity around transaction banking and offering core financing products, and we are committed to growing it,” he told The Nation.

Muehlen said hedging activity is intensifying and looks positive this year. DB has had more client demand for support expanding overseas.

“We have been in the Thai market for nearly 44 years now. When the financial crisis hit the region, several foreign banks pulled out. Deutsche Bank stayed in the region through the crisis,” he said, adding, “We’re proud to have been locally embedded for so long.”

Chief country officer Pimolpa Suntichok said Deutsche Bank projected total revenue growth in the country of 10-15 per cent for 2022, witnessing growth in the number of non-resident and local Thai customers.

“In Thailand, roughly two-thirds of our business is derived from multinational companies, but in the past year we have seen very strong growth in our volumes with local Thai companies as we support them, especially with increasing demands around growing outbound investment activity,” she said.

Regarding Thailand’s evolving financial and banking scene, as digital assets increasingly come into play, Pimolpa said the local market is adapting quickly, as is the regulatory landscape, including related taxes.

The Thai economy is expected to recover from last year. However, there is no sign to indicate it will reach pre-Covid levels.

Economic growth in 2022 is expected to be 3.0-3.5 per cent, compared to 0.8 last year and -6.1 in 2020, according to a recent report by the Thailand Development Research Institute.

“Economic growth this year will be led by a recovery in business activities and purchasing power, provided there are no extended lockdowns from the pandemic,” the report added.