Thailand's KBank Has Lost Money in Vietnam for Five Straight Years

[Thailand's KBank Has Lost Money in Vietnam for Five Straight Years]

When Vietnam played Thailand in the ASEAN Cup final, Madam Pang was in the stands at Mỹ Đình, and Vietnamese media wrote about her again. Her real name is Nualphan Lamsam. She chairs the Football Association of Thailand, and she is a fifth-generation member of the Lamsam family. The family business is not football. It is banking: KBank, or Kasikornbank, founded in 1945, now Thailand's second-largest bank by total assets, with 20 million customers across nine countries and group net profit of about THB49.6 billion last year.

That bank got its Vietnam branch licence in January 2021 and opened in Ho Chi Minh City in August 2022. In March 2023 it laid out the plan: more than USD1 billion to be spent through 2027, roughly seven-tenths of it on the bank itself and the rest split between its venture arm KVision and its tech unit KBTG. The goal was to be among Vietnam's 20 largest banks by assets by 2027.

The audited numbers, which Vietnamese outlets dug into in late August, tell a different story. KBank's HCMC branch has posted a pre-tax loss every year from 2021 to 2025, roughly VND1.02 trillion in total, or about USD38.6 million. The worst year was 2024 at around VND422 billion; last year it narrowed to about VND315 billion. Against the parent bank that is small change — under 3% of one year's group profit. But the Vietnam books still have not turned a profit.

Last year's figures show why. Net interest income came to about VND378 billion. Operating costs were VND591 billion, and the branch set aside another VND120 billion for credit losses. Core income does not cover the running costs, let alone the provisions.

Yet the business itself has been growing. Over five years total assets rose about 9.6 times and customer lending more than 21 times. The scale is there. The profit is not.

The problem is where the money comes from. At the end of last year the branch held about VND5.54 trillion in customer deposits against VND13.79 trillion in loans — deposits cover roughly 40% of the loan book. Add the branch's USD285 million of allocated capital to those deposits and you still fall short of the loans outstanding; the summary financials do not say where the rest comes from. Local deposits are not funding this book, and without deposits, funding costs stay high. This is not new. Back in 2023, loans and deposits both grew more than 200% year on year, and the gap between them was already there.

The cost base follows from the customers KBank went after. It targeted retail and small merchants. Executive vice president Chat Luangarpa said at the time that more than 69% of Vietnam's working-age population had no bank account, the highest share in Asia. So the products were K PLUS Vietnam, a mobile banking app, and KBank Biz Loan, digital lending for shopkeepers, while KVision invested in local startups including Sendo, KiotViet and Seedcom. Users did come: K PLUS Vietnam went from 470,000 in 2023 to 1.14 million by February 2024, and KBank has not published a figure since. But the original target, set when the branch opened in August 2022, was 1.2 million customers and more than USD500 million in lending by 2023 — more than a year behind. By this year, KBank's Vietnam operation had shifted toward corporate clients, SMEs and trade finance.

Two other routes have worked for foreign banks here. The first is to stick with FDI companies and cross-border trade flows. HSBC Vietnam made VND4.14 trillion in pre-tax profit last year on exactly that business, and its deposits far exceed its loans — the mirror image of KBank. The second is to follow your own country's manufacturers in, then build retail slowly. Shinhan Vietnam earned about VND5.41 trillion pre-tax last year, and it did not win those retail customers one at a time: it took over ANZ's Vietnam retail business in 2017, and ANZ had been in the country since 1993.

The licence itself matters too. Shinhan and Woori operate as locally incorporated banks, so they can put branches wherever they want. Woori has offices in Đà Nẵng, Bắc Ninh and other provinces thick with Korean factories, and Malaysia's Public Bank Vietnam runs 40 locations. KBank has one branch, in Ho Chi Minh City. Retail deposits have to come through an app.

Last year was hard across the board, though. HSBC's profit fell 6.9%, a four-year low, and Shinhan's fell 6.2%. The squeeze was the same everywhere: net interest and fee income down, operating costs up. Vietnamese banks have also moved deeper into foreign exchange, trade finance and large corporate clients, eroding what used to be a foreign advantage. Some players have simply left. Citi sold its Vietnam retail and consumer credit card business to UOB in 2023, and ANZ handed its retail arm to Shinhan back in 2017.

As for cracking the top 20 by 2027, KBank has not publicly revised the target. Of Vietnam's 27 listed banks, the smallest by assets at the end of last year was Saigonbank at about VND35 trillion. KBank Vietnam stood at VND24.35 trillion — smaller than the smallest listed bank. And those banks keep growing: the 27 added 23% to their combined assets last year. To make the top 20 within two years, KBank would need to multiply its asset base several times over while its competitors keep expanding above 20% a year.

Running a bank in Vietnam takes more than a licence and capital. What decides the profit line is your customer base and your funding costs, and both take time to build. HSBC opened its first Saigon office in 1870. The retail customers Shinhan inherited came from an ANZ that arrived in 1993. KBank set out to buy the same position with five years and a billion-dollar budget. On the current numbers, five years was not enough.

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