What new initiatives is Standard Chartered involved in?

KOK: For 2013, we have a number of new initiatives that we are looking at. We have two separate businesses. For wholesale banking, we are continuing to follow our customers and clients overseas, helping fund their investments, and helping them raise money. We will continue to do this through fund raising exercises, cash management, foreign exchange hedging, and all of the normal wholesale banking activities. On the consumer bank side, we are looking to transform our digital strategy. Today, people want to have access to banking anytime and anywhere. Understanding how to use technology to our benefit is what we are looking at. Service is a differentiating factor for us. We are not a very large bank here. We have 27 branches. We have to use technology in order to reach our customers. We want to bring our people to the customers, so they can serve them better. The overarching opportunity for Standard Chartered in Thailand is the opening of our Myanmar office. We recently opened up our representative office there in February. Thailand’s strong relationship with Myanmar will result in a lot of opportunities for our clients, and for Standard Chartered as a result of that.

Are you happy with Standard Chartered’s performance in 2012? What are your goals for 2013?

KOK: 2012 was a difficult year for Thailand. After the floods in 2011, it took time for the country to get back on its feet. Given these conditions, and the global crisis taking place, the overall performance of Standard Chartered was pretty decent. Our net, after tax profits, grew 9%, which is 150% greater than the growth rate for the country. Overall, given the headwinds that we are facing, it has been a pretty satisfactory performance. Looking ahead, we do not expect the GDP number to be picking up. In fact, 6.4% was driven primarily by a huge consumption drive. The question is what will be the major drivers for 2013. For our bank, we are positioned quite well. We still see growth in exports in the ASEAN region. 24% of Thailand’s trade is still within this region. ASEAN is positioned to grow very well, especially with the addition of Myanmar. China will continue to grow, albeit at a slower rate, but it is still growing. Standard Chartered’s presence in China and India has positioned us quite well. I am optimistic for 2013. We will be focusing on ASEAN, as well as China, India, and Korea. For the consumer bank business, consumption will continue to be one of the major bank drivers. The savings rate of the country can result in more borrowing from individuals, particularly if they are targeting good purposes, as opposed to speculative purposes. We should see good growth there, as well on the consumer side.

What are your thoughts on the Thai government’s borrowing going forward?

KOK: The public debt to GDP number for the Thai Government is relatively low compared to what is was 15 years ago. The capacity of the Thai government to borrow more is certainly there. The question is, what are they going to be borrowing for, and what are the reasons for the borrowing. Certainly the upgrade to Thailand’s rating bodes quite well. I think the fundamentals of the country are quite strong. Going forward, there will be more borrowing, because the government has many plans and projects, especially infrastructure improvements. I think at the moment the borrowing is fine. There are many checks and balances in the government for deficit, and GDP, and the caps are still there. There is still room for them to borrow. It all comes down to putting these funds to productive uses. Thailand has been running current account surpluses, so a strengthening Baht will hurt exporters, but it will also help importers. It depends on where the investment cycle is for some of these businesses. This may be a good time for some of the manufacturing industries to begin to look at more productive uses of their machines, and becoming more efficient. A strengthening Baht will hurt exporters, depending on which countries they are exporting to. There are financial instruments we can deploy to help cushion the volatility of the exchange rate. This is more difficult to manage than a consistently strengthening exchange rate. I think what we need to see is consistency, as opposed to volatility.

What are your thoughts on future banking liberalization measures?

KOK: Liberalization in general is always a good thing. It results in more competition, and this means that everyone will get the best deal possible. It needs to be done in such a manner that it does not create a systemic risk in the industry. The gradual liberalization of Thailand’s two master plans have been good for the country. The level of asset control by foreign banks is relatively good here. I worked in China for 7 years, and the foreign banks only controlled about 1.5% of the assets. At the end of the day, it all depends on what the foreign banks really want to do. As they come in, it depends on if they want to set up three branches under sector plan 1, or under a subsidiary model, that allows up to 20 branches. It depends on where they want to compete. In wholesale banking, where most of the banks want to compete, the market is pretty open and pretty liberal. The liberalization under FSMPP 1 and 2 tries to address the retail market. Even then, a number of foreign banks have competed very well on certain types of products. The market here has been pretty open. It is really the branching that has been liberalized.

How will the AEC in 2015 affect regional banking?

KOK: AEC 2015 has many different strands. It started off with trade liberalization. For banking, we hope ASEAN banks will have access to other ASEAN countries. For some of these banks with regional aspirations, this would be a good entry to some of these markets. It still is a work in progress.

How do you want the international investment community to view Standard Chartered?

KOK: Standard Chartered Bank Thailand is in a very unique position because of the Asian Financial Crisis. A number of banks were in trouble, and Standard Chartered was able to buy into local banks. We completed the integration in 1999. This made Standard Chartered a local bank. We are now governed under the local regulations. I would like Standard Chartered Bank Thailand to be known as a local bank with a strong international presence. There are 70 countries that are part of the Standard Chartered Group. We are an international bank, bringing international practices to the local market. I would like us to be known as the best local-international bank. We are more international than any local bank, and more local than any international bank. It is a very unique position for us here in Thailand