Krungthai – PTTEP engaged in Thailand’s first ESG-linked currency risk management; continuing the success of PTTEP digital bond

Krungthai and PTTEP further build upon their successful collaboration in the offering of PTTEP digital bond by entering into Thailand’s first ESG-linked cross currency swap agreement. 

Payong Srivanich, President and CEO of Krungthai Bank, revealed that after the successful offering of PTTEP digital bond where 6 billion Baht bond was fully subscribed within 8 minutes and 12 seconds, Krungthai and PTT Exploration and Production Public Company Limited (PTTEP) entered into an ESG-linked cross currency swap (CSS) contract for the PTTEP digital bond. This marks the first time in Thailand that ESG reporting is linked to cross currency swap, showcasing an important stepping stone for Thai capital market and financial sector to extend ESG principles to cover financial risk management, in addition to the current ESG operations which focus mainly on loan products such as green loans. The ESG-linked cross currency swap will link ESG goals of both Krungthai and PTTEP to the swap’s interest rate and the rate may increase or decrease depending on each company’s sustainability index. 

This agreement further highlights Krungthai’s commitment to its mission, conducting business sustainably and respecting all stakeholders, as well as fortifying the bank’s position as a leading ESG financial solution provider. The bank has been relentlessly developing digital infrastructure as well as using it to improve the quality of life of Thai people and address Sustainable Development Goals (SDGs). The bank uses technology to enhance the efficiency and upgrade the Thai capital market by offering innovative products that promote economic growth. The mobile application Pao Tang, which is developed by Infinitas by Krungthai to be a Thailand open digital platform, aims to make activities relevant to all aspects of life simpler, safer, more convenient and accessible anytime, anywhere. The activities include payments under government schemes via G-Wallet and activities relating to healthcare, education, savings and investment.

The bank also puts much effort in addressing environmental issues, for example, by giving green loans and offering paperless products and services. The most recent PTTEP digital bond is scripless and could be subscribed via Pao Tang making the subscription paperless and requiring no travel to a bank branch. With over 33 million users already on Pao Tang and the app being familiar to most people, using it as a subscription channel has made investment products including 1-Baht bond and PTTEP digital bond, of which minimum subscriptions were only 100 and 1,000 Baht respectively, available and easily accessible to people of all social strata. The digital platform is also highly transparent, secure and verifiable. The bank is ready to partner with companies and organizations to develop innovative financial and investment solutions to meet the needs of different groups of customers, so that they can have diversified investment portfolios and manage their risk against fluctuations in financial markets.

Sumrid Sumneing, Executive Vice President for Finance and Accounting Group, PTTEP, said this PTTEP digital bond’s ESG-linked cross currency swap agreement is an effort to manage currency risk in alignment with the company’s functional currency and intended use of proceeds. The agreement highlights the company’s commitment to becoming a sustainable organization that promotes mutual benefits of all stakeholders and reinforces the country’s energy security. 

Marketing Strategy Team

8 November 2021