Four major Thai banks, including Thai Military Bank, Bank of Ayudhya, CIMB Thai Bank, and Bangkok Bank, have decided to close their branches in Laos.
Key Takeaways
- Four major Thai banks are closing branches in Laos due to stricter regulations and decreased business activities.
- The banks cited tighter regulations imposed by Lao authorities, increased operating costs, and a decline in cross-border trade and investments as reasons for their withdrawal.
- While some major Thai banks continue to operate in Laos, others are reassessing their business strategies and closing branches that are not meeting targeted returns.
The branches to be closed are Thai Military Bank’s Vientiane branch, Bank of Ayudhya’s Savannakhet branch, CIMB Thai Bank’s Vientiane branch, and Bangkok Bank’s Pakse branch in Champasak province.
Bangkok Bank had opened a second branch, in Pakse, on January 5, 2016 to expand services to southern Laos and the Emerald Triangle.
However, Bangkok Bank, Bank of Ayudhya (Krungsri), Krungthai Bank, Siam Commercial Bank and Kasikornbank (KBank) continue to do business in Laos with their other branches.
They cited stricter regulations and decreased business activities as the primary reasons for their withdrawal. The Lao authorities imposed tighter regulations on lending and foreign exchange management, making it difficult for the banks to conduct business.
Additionally, the increase in minimum registered capital per branch has raised operating costs. The decline in business activity, particularly in cross-border trade and investments between Thailand and Laos, also contributed to the decision. However, other major Thai banks continue to operate in Laos and see potential business opportunities in neighboring countries.
Bangkok Bank opened a Vientiane branch on August 5, 1993 becoming one of the first Thai banks to open in Laos’ capital city. The Vientiane branch was relocated to a newly-renovated historical building on January 13, 2014.