Four Major Thai Banks to Close Branches in Laos

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Four major Thai banks, namely Thai Military Bank, Bank of Ayudhya, CIMB Thai Bank, and Bangkok Bank, have decided to shutter their branches in Laos, signaling shifts in the regional banking landscape.

The closures come against stricter regulations and a downturn in business activities in Laos, prompting the banks to reassess their operational strategies. Factors contributing to the closures include tightened regulatory requirements imposed by Lao authorities, increased operational expenses, and a notable decline in cross-border trade and investments.

The affected branches include 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. Notably, Bangkok Bank expanded its footprint in Laos by inaugurating a second branch in Pakse on January 5, 2016, to enhance services to southern Laos and the Emerald Triangle.

Despite these closures, Bangkok Bank, Bank of Ayudhya (Krungsri), Krungthai Bank, Siam Commercial Bank, and Kasikornbank (KBank) remain operational in Laos through their other branches, underscoring their commitment to the regional market.

Challenges such as an increase in minimum registered capital per branch have contributed to heightened operational costs, making some branches financially untenable. Moreover, a slowdown in business activities, particularly in cross-border trade and investments between Thailand and Laos, has further impacted the decision-making process.

It is noteworthy that while some major Thai banks are scaling back their operations in Laos, others continue to identify potential business prospects in neighboring countries. Bangkok Bank, for instance, marked its entry into Laos by establishing a branch in Vientiane on August 5, 1993, positioning itself as one of the pioneering Thai banks in the Lao capital. The Vientiane branch underwent relocation to a newly renovated historical building on January 13, 2014, signifying the bank’s long-term commitment to the Lao market.