Thai mega-companies form alliances to grab three virtual bank licences

Interested candidates have until September 19, or six months, to submit their application to establish virtual banks in Thailand, of which only three will be allowed by the BOT regulator.

The first contender for the licence to announce their move was Gulf Energy Development Plc (Gulf). CEO Sarath Ratanavadi on Tuesday said that the energy conglomerate would team up with telecom giant Advanced Info Service Plc (AIS), Krungthai Bank Plc (KTB) and PTT Oil and Retail Plc (OR) to form a joint venture to establish a virtual bank.

Sarath believed that with Gulf’s technology know-how, AIS’s and OR’s vast user bases, and KTB’s financial expertise, the joint venture would thrive under 5-billion-baht investment budget.

Next up is SCBX, a financial arm of Siam Commercial Bank, which is forming an alliance with a Chinese technological company to prepare for operating a branchless bank in Thailand.

CEO Arthid Nanthawithaya on Wednesday said the joint venture will be officially announced in the next few days, with another partner being KakaoBank, South Korea’s largest digital bank, which SCBX had signed with last year.

Meanwhile, Charoen Pokphand (CP) Group, Thailand’s largest conglomerate, said they also want a piece of the virtual bank cake.

CP Group CEO Suphachai Chearavanont told the Nation that the group is preparing to apply for a virtual bank licence, and will operate either with partners or via its subsidiary TrueMoney, which is backed by China’s biggest financial investment company Ant Group.

“We have no current plan to team up with others in operating a virtual bank, but the possibility is not zero,” said Suphachai.

Thailand now has 17 conventional commercial banks, and so three should be an appropriate number of virtual banks, noted the BOT.

Singapore has four virtual banks and 34 conventional banks, while Malaysia has three virtual banks and 42 conventional, and in South Korea the ratio is three to 52.

BOT’s criteria for virtual bank operators include being a public limited company with a Thailand head office, and is able to begin operating within one year. The operator must have registered capital of at least 5 billion baht, and must increase that to 10 billion baht within five years.

The central bank is expected to announce the licence winners by June of next year, with the virtual banks beginning operations by June 2026.