Top Thai bank closes Hanoi, Yangon branches

Top Thai bank closes Hanoi, Yangon branches

BANGKOK (AFP): Thailand's second largest commercial bank is to shut representative offices in Vietnam and Myanmar next week to cut costs as the institution is battered by the regional slump, reports said yesterday.

Thai Farmers' Bank will close the offices in Hanoi and Yangon as "the number of Thais wanting to do business in both nations has dropped because of the economic crisis," it reportedly said.

Representative offices, which do not offer the full services offered by banking branches, do not directly generate income as their role is to advise customers in host countries.

However the offices can be expensive to set up and maintain -- the bank's Myanmar office costs an estimated 3,000 to 4,000 dollars a month to run, not including staff salaries, the Bangkok Post said.

Other Thai banks including Thai Military Bank and Siam City Bank are also reducing the number of staff in foreign offices and recalling Thai personnel to lower operating costs, the newspaper added.

Thai Farmers' and other banks are unsure as to whether Myanmar's military government will allow foreign banks to open full branches, making the investment in representative offices hard to justify, it said.

Thai Farmers Bank was the second Thai bank to open a representative office in Yangon in 1994 amid plans by the Myanmar government to allow foreign joint ventures in the banking sector.

But the plan was later called off after the authorities appeared to baulk at the idea of fully opening up the market.

The bank has said it will "consider applying for full branch licenses (in Vietnam and Myanmar) in the future, when both nations have a policy to allow commercial banks to operate as full branches."

Thai Farmers will however retain 13 other representative offices abroad, many of them in Asia, The Post said.