Tisco senior executive vice president Oranuch Apisaksirikul said that with its long years of experience and local expertise, the bank would be able to do business on its own.

She added that the bank was also strong in services and risk management that would expand its quality loans. 

Presently, the three leaders in the country's auto-loan market are Thanachart Bank, GE Auto Lease and Tisco Bank.

Thanachart has offered a majority stake of 24.99 per cent to Nova Scotia Bank. GE has also transferred its assets to Bank of Ayudhya as its parent bank has completed the acquisition deal with the sixth-largest local bank.

Oranuch said Tisco had advanced loans of Bt4.45 billion in the first quarter of the year for new vehicles, an 8.2-per-cent growth from last year. The small-sized bank believes it would achieve its new-loan growth target for the year of 17 per cent, or Bt10 billion, of which around Bt9 billion would be car loans.

Despite a slowdown in domestic consumption and sluggish car sales in the first quarter, the bank showed a satisfactory loan growth rate. Tisco believes its loan expansion during the rest of the year would be on target, supported by downward interest-rate trends.

"The bank has done well in providing [car] loans compared to the earlier period, especially when rates are higher. Our business would certainly gain when rates decline. A flat rate is quoted for auto loans. Therefore, we are not concerned about business expansion this year," she added.

With new-car sales dropping, Tisco has shifted its focus to used-car loans, whose average effective rate is 8 per cent, higher than the new-car loan interest rate of 6 per cent. The bank expects the used-car loan portfolio would increase to 18-20 per cent of total loans by the end of this year from around 15 per cent now.

Currently, the bank's outstanding auto hire-purchase loans are Bt58 billion, or around 80 per cent of its total loan portfolio. Non-performing loans are at 1.8 per cent.

Tisco reported a net profit in the first quarter this year of Bt356 million, up by 11.9 per cent quarter on quarter. The bank's interest income was Bt1.69 billion, increasing 13.1 per cent compared with the previous quarter, in line with the rise in its rate spread (difference between the lending rate and the deposit rate) from 2.7 per cent to 3.2 per cent.

Somruedi Banchongduang

The Nation