Bank of Ayudhya (Krungsri), in partnership with parent company Mitsubishi UFJ Financial Group (MUFG) and other regional partner banks, is supporting customers’ business expansion across Southeast Asia to capitalise on the region’s robust growth potential.
In an exclusive interview with the Bangkok Post following the Krungsri ASEAN LINK Forum held recently in Bangkok, Masakazu Osawa, managing executive officer and chief executive for Asia-Pacific at MUFG, said that despite higher global economic uncertainties and ongoing geopolitical tensions, Asean economies continue to show robust GDP growth.
In 2022, the region attracted record levels of foreign direct investment (FDI), reaching an all-time high of US$224 billion, with this positive outlook expected to continue, Mr Osawa said.
“Asean is experiencing a surge in investment, supply chain relocation, and infrastructure development. Additionally, the region benefits from competitive labour costs, strategic geographic positioning, and a pragmatic, pro-business environment,” he said. “Asean governments should continue investing in infrastructure, particularly in logistics, digital networks, and workforce development. Such advancements would position Asean as a top destination for long-term FDI, while bolstering alternative supply chains and production bases.”
According to Mr Osawa, improvements in the investment environment and regulatory framework are crucial for enhancing ease of business for offshore investors and international operators. Specific measures, such as tax incentives, investment protection agreements, and streamlined visa procedures, play a key role.
In addition, creating specialised industry clusters and encouraging the concentration of related companies can generate synergy and drive growth.
He said cross-border trade and investment can be boosted by advancing economic integration within the Asean Economic Community framework, which will be very helpful in reducing tariffs and dismantling non-tariff barriers.
These measures would strengthen regional supply chains and encourage companies to build production networks that leverage each country’s comparative advantages, thereby enhancing the region’s overall appeal to investors and businesses.
With growing business opportunities in Asean, MUFG collaborates with Krungsri and other regional banking partners to support local, regional, and multinational clients in expanding their inbound and outbound investments within the region, Mr Osawa said.
As part of the Asean LINK strategy, MUFG, Krungsri, and three partner banks – Bank Danamon in Indonesia, VietinBank in Vietnam, and Security Bank in the Philippines – recently signed a memorandum of understanding to establish Asean Link desks, aimed at providing seamless and efficient support for clients investing in the region.
The dedicated business advisory teams in each country work closely together to provide insights into the local market, international regulations, and financial products and services that best meet customers’ needs.
Recognising the immense potential of Southeast Asia, MUFG has acted swiftly, investing over US$17 billion in the past decade to build an unparalleled regional franchise that encompasses Krungsri, Bank Danamon, Security Bank and VietinBank. These four banks, along with MUFG, operate across more than 1,500 business locations in 18 markets throughout Asia-Pacific.
“MUFG and Krungsri play a pivotal role in connecting Thai companies with regional opportunities within Asean,” Mr Osawa said.
As the prime driver of the Krungsri ASEAN LINK strategy, Krungsri operates in six regional subsidiaries across five countries: Hattha Bank in Cambodia, Krungsri Leasing Services in Laos, SHB Finance in Vietnam, SB Finance and Home Credit in the Philippines, and Home Credit in Indonesia.
Krungsri also has a representative office in Myanmar and a branch in Vientiane, Laos.
Mr Osawa said MUFG and Krungsri have partnered to invest in promising digital financial startups in the region, capitalising on the growing wave of digitalisation. Both parties are working to help fintech companies accelerate and scale their growth.
The collaboration enables both banks to better serve Thailand’s unbanked and underbanked populations, as well as digitally-savvy consumers.
MUFG is supporting Krungsri’s business expansion in sustainable finance, which includes sustainable deposits, ESG bonds and social loans. In March 2024, Krungsri became the first commercial bank in Thailand to introduce sustainable deposits, leveraging MUFG’s expertise in green deposits, which have already been implemented in the Asia Pacific region.
Krungsri has underwritten ESG bonds totalling about 9 billion baht, making it the second-largest domestic bank in Thailand in this area.
In August 2024, Krungsri utilised MUFG’s expertise in sustainable finance to issue its first social loan for Japanese companies in Thailand.