THE COUNTRY'S biggest lender to small and medium-sized enterprises, Kasikornbank, will limit growth of its outstanding loans this year to 7 per cent despite its above-target first-half results as it wants to focus on existing clients before chasing new on
Executive vice president Patchara Samalapa said the bank was also attempting to encourage SME clients to use fund transfers instead of cash, which most of them prefer. If the bank can push SMEs into using fund transfers, that could boost revenue for KBank’s SME business division, he said.
Patchara said it would not be difficult to boost new loans in the current second half because the prospects for the economy are brighter. However, the bank does not want the loan portfolio to grow by more than 7 per cent – it believes looking after its existing customers well will be beneficial in the long run.
“The overall business outlook is set to improve in the second half of this year, while SME loans for the entire year are anticipated to reach Bt553.45 billion, up 7 per cent year on year,” he said.
The inflation rate is expected to remain low thanks to the present policy of leaving the value-added-tax rate unchanged at 7 per cent. Because of better global economic and trade activity, particularly in trade partner countries, Thailand’s exports are likely to advance and, in turn, help boost revenue for export-oriented SMEs.
KBank’s SME business division in the first half reported outstanding loans of Bt538.4 billion, up 11.3 per cent year on year. The division’s total revenues were Bt19.5 billion, an increase of 14.3 per cent. The rate of non-performing loans dropped to 2.66 per cent, from 2.82 per cent at the end of 2013.
New SME lending was registered at Bt143.4 billion, or an increase of 13.9 per cent, of which Bt35.59 billion was recorded in June alone, marking the highest new loans per month in two years. The bank believes this reflected SMEs’ confidence in economic conditions, thus demanding more loans for business expansion and working capital.
Among the new customers acquired by KBank, new lending was mostly granted to businesses in the construction, agricultural and hardware industries, representing 24 per cent of total new loans.
Credit was mostly extended to customers in construction, agricultural and hardware businesses.
Over the second half of this year, KBank’s policy will focus on giving assistance to customers in any potential crisis, in tandem with its business slogan, “K SME Full Support for SMEs”. Credit limits, advisory service, it says.