Siam Commercial Bank (SCB) plans to reduce its business operations over the next 12 to 18 months due to an anticipated weaker outlook for the Thai economy.
CEO Kris Chantanotoke stated that both the Thai economy and the business environment are expected to face increased difficulties during this period.
Major challenges include US-imposed tariffs and high household debt levels, which are likely to hinder Thailand’s economic growth, he explained.
“The uncertainty surrounding US tariffs on Thai exports could negatively impact export performance in the latter half of the year. Thailand’s exports to the US constitute about 20% of the total, highlighting its long-standing reliance on the US market,” he noted.
Mr. Kris emphasized that if tariffs increase by 10% more than those faced by regional peers, Thailand’s economy could suffer significantly, reducing its competitiveness.
For 2025, SCB forecasts a GDP growth of around 1.5%, with a slowdown to approximately 1% in the second half, raising concerns about the possibility of a technical recession.
Furthermore, the ongoing burden of household debt will continue to restrain economic growth and limit loan expansion in the banking sector.
“In view of these challenges, SCB will adopt a more cautious stance in its business operations over the next 12–18 months,” Mr. Kris explained.
As part of this approach, the bank will accelerate its digital banking initiatives, aiming for 25% of total revenue from digital sources by 2025. Achieving this target this year would lead to setting higher digital income goals in future years to help reduce operational costs.
SCB is also working to lower its cost-to-income ratio, which decreased to 36.8% in the first quarter of this year.
Mr. Kris pointed out that increased emphasis on digital banking will continue to diminish the need for physical branches, aligning with the overall decline in in-person transactions.
He mentioned that the bank has already scaled down its branch network to approximately 800 outlets, reflecting a shift away from traditional banking channels.
Ultimately, the number of remaining physical branches will be influenced by how widely digital banking is adopted, although physical branches will remain necessary for SCB.
Additionally, Mr. Kris highlighted that the bank will focus more on corporate banking, given its high growth potential.
Simultaneously, SCB plans to selectively expand its SME and retail lending, especially in mortgage loans.
Wealth management will also be a focal area for growth, targeting affluent clients across corporate, selective SME, and housing loan segments.
