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Published on March 29, 2008

"Our profit should expand this year as we grow stronger, and there's no need for loan-loss provisions," managing director Visut Kittisamuth said yesterday.

Finansa recorded an operating profit of Bt300 million last year, but provisions of Bt275 million under the new provisioning rules ate into its earnings In the end, it posted a net loss of Bt260 million.

It is one of five existing finance companies. Although not a bank, subsidiaries are expected to build a strong network for business synergy, Visut said.

Finansa's outstanding loans this year are expected to rise to Bt4 billion, from Bt3 billion last year, mostly through personal loans to employees of participating corporations.

The company this year plans to lend to employees of up to 100 companies, and its personal-loan portfolio should rise from Bt130 million now to Bt300 million. The number of borrowers will also double from 2,500. The market is expanding as it offers an interest rate of 10 per cent, compared with an average of 18 per cent at other institutions.

Meanwhile, Finansa's hire-purchase portfolio is expected to double to Bt2 billion this year, with a focus on imported-car dealers.

The deposit base will rise to Bt7.6 billion this year, from Bt4.3 billion. The ratio of individual depositors will rise to 45 per cent of the total, from 33 per cent now.

"The economy is heading upwards this year, which should temper the non-performing loans," Visut said, adding that the institution's interest-rate margin would be about 3 per cent points, while NPLs should drop from 20 per cent to 13 per cent.

Siriporn Chanjindamanee

The Nation