The banking landscape in Asia has seen more foreign banks expanding in the region. Most recently, the Australia and New Zealand Banking Group (ANZ) – Australia’s third largest bank – was granted a subsidiary banking license to open 20 branches across Thailand; signaling the Thai government’s readiness to accept more foreign bank investment. Leon Perera, Chief Executive Officer of Spire Research and Consulting, shared his view on Thailand as an investment banking location.
ANZ reckoned that the size of Thailand’s economy, its importance as a regional manufacturing center, as well as its proximity to other South East Asian markets amounted to a positive long-term outlook for the country. Previously, Thailand had opened its doors to other foreign banks, including Japanese banks Mizuho, Bank of Tokyo-Mitsubishi and Sumitomo-Mitsui, just to name a few.
While mobile banking may become an important channel in future, ANZ and the other foreign banks in Thailand should continue to look into developing physical banking channels, as cash remained as the principal mode of transaction in the country.
Perera highlighted that despite the recent coup in Thailand, the government would continue to accept applications from foreign banks to set up subsidiaries, in the hope that this would signal the new government’s willingness to give foreign investors market access and a level playing field, reinforcing investor confidence. ANZ’s decision would clearly be a boost to Thailand’s standing as a foreign investment destination, which would have taken a knock due to the recent political turmoil culminating in a military coup.
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