No More Coffee Shops At KBank In Thailand

President Prasarn Trairatvorakul said KBank had not gained the full benefits from its coffee-banking strategy - customer-base expansion through coffee drinkers - that it had expected earlier.

Customers patronising the coffee shops located in KBank's branches have not been very interested in the bank's financial products and services.

As a result, the bank has decided to halt the strategy. Once space-rental contracts with the coffee retailers expire, they will not be extended. The vacated space will be used instead for other business activities that generate more income for the bank, particularly financial products and services belonging to the bank and its subsidiaries.

KBank introduced the banking-coffee strategy, claimed to be the first service of its kind in Asia, more than four years ago. The strategy was aimed at providing greater convenience and a more relaxed atmosphere for customers while they were doing their banking.

The coffee-banking concept, moreover, was a marketing strategy by the country's fourth-largest bank to add colour to its branches. KBank joined hands with coffee retailers, both local and international, in particular the world-famous Starbucks Coffee. The bank allowed the American coffee brand to open shops in three of its five coffee-banking branches.

However, one Starbucks shop - in KBank's Phaholyothin branch - has already closed, and the other two - in Siam Centre and Sukhumvit Soi 33 - will soon also shut soon.

Prasarn said the bank would gradually close the remaining coffee shops.

Senior vice president Wirawat Panthawangkun said customers wanted speed in banking transactions; thus, the coffee-banking concept was unlikely to fit with current customer demand.

"Although the concept was quite successful after it was launched - it was the talk of the town for a while - success doesn't last forever. When it's time, the concept must be changed," he said.

Meanwhile, Prasarn said KBank was targeting the addition of about 40 new bank branches this year to its current 604. The bank also plans to add another 1,000 staff to its 12,000 now.

The new 1,000 employees will be recruited mainly for the Sales and Marketing Division. Staff in the Business Support Division and the back office will not be increased significantly.

"Although the staff increase will cause the bank's personnel expenses to rise, it's worth it, considering the prospects for the bank's future income," he said.