Currently, Aeon Thanasinsap (Thailand) and GE Capital (Thailand) are ranked No 1 and No 2, respectively, in terms of market share. The two companies together have outstanding consumer loans of Bt20 billion, or half of the market's total outstanding debt of Bt40 billion.

KTBL plans to launch a consumer-loan product next Tuesday, adding to its three existing products: auto-leasing loans, hire-purchase loans and car-rental service. The move is part of its plan to fulfil the parent bank's financial-service strategy under the convenience-bank concept.

"Consumer loans will become the company's key product, with a share of 20-30 per cent of the total loan portfolio this year. Its proportion will increase to 35 per cent next year and 50 per cent in 2009," Preecha said.

This year, KTBL plans to provide new loans for all products totalling Bt11.7 billion, or a growth rate of about 400 per cent from its total outstanding debts of Bt2.5 billion at the end of last year. The consumer-finance firm started business last October and recorded a net loss of Bt14 million for last year.

In line with its aggressive goal for loan expansion, KTBL has also projected an ambitious net profit of Bt30 million to 40 million for this year and Bt300 million for next year.

"Next year, the company will be able to contribute the largest amount of revenues to its parent bank, compared with the other KTB subsidiaries," Preecha said.

He said the expected significantly higher growth of net profit was based on the business cycle of hire-purchase loans. The customer base and selling channels that will be supported by its parent bank will also promote the company's business. KTBL will use a customer base of 12 million deposit accounts and more than 700 KTB branches to expand lending.

Moreover, its attractive charge rate is another key strategy for appealing to customers. Its average effective rate is 15 per cent a year, compared with 20-24 per cent charged by other consumer-loan providers, which will be supported by its lower funding cost. The company's key source of funds is its parent, KTB.

Somruedi Banchongduang

The Nation