Low Interest, High Principles

Southeast Asia's local bankers have customarily operated on two principles: keep interest rates up and keep controversies with the government down. The maverick Bangkok Bank has reversed both principles, yet has become the largest commercial bank in Thailand. It has increased its assets tenfold in the past ten years (to $180 million), and since 1960 has doubled its number of branches. Besides its 42 domestic locations, the bank also has nine foreign outposts, from Saigon to London. Last week, while designing a 16-story home office that will be Bangkok's tallest building, the bank was also planning to expand still farther abroad. In Manhattan Vice President Paul Sithi-Amnuai, 30, made final arrangements for its first U.S. office, scheduled to open on Wall Street in September.

Drive In. Bangkok Bank's worldly successes are due to its exuberant courting of small savers and borrowers at home. It makes loans to individuals and firms at 12% interest, compared to the usual 25%, also offers liberal mortgage terms. It has opened Thailand's first drive-in bank and, to woo women customers, has a branch that is staffed entirely by women. "There are some things women can explain better to women," says Mrs. Punnee Kantasen, the branch manager. "Talking to a woman about small loans is easier than trying to explain to a man."

Among the bank's most important customers are Thai farmers, whose rice and corn bring in 42% of Thailand's export income and account for much of its 6% economic growth rate. In the first program of its kind, the bank makes crop loans at 12% to 15% interest--compared to the 180% some village moneylenders charge--and has written 9,000 loans averaging $150 each, with practically no defaults.

To further help the peasantry, the bank has recently put forward a much-debated plan for revamping the Thai economy. It not only calls for crop-support programs, but also urges repeal of the 25% export tax on rice, by which the government gets 8% of its revenues. Farm taxes would be replaced by excises on tobacco and urban property, helping distribute the nation's tax load and its income more equitably, aiding Thailand's industries by giving farmers more power to purchase manufactured goods. The government publicly opposes the idea, but some officials privately favor it.

Chin Up. Controversy is nothing new to the businessman who controls 60% of the bank's stock, President Chin Sophonpanich, 54. He made--and lost --several fortunes in the export-import trade, fell out with the late Prime Minister Sarit Thanarat, and lived outside the country from 1957 until last year. Even in his long exile in Hong Kong, Chin used his wide international contacts to build up the bank's foreign business, left its local affairs in the hands of a youthful staff. Whatever its reservations about Chin, the government is happy to see his bank prosper. Bangkok Bank has obviously helped to enrich the economy and has paid substantial dividends to its largest minority stockholder, the Thai government, which owns 30% of the shares.

This file is automatically generated by a robot program, so reader's discretion is required.