SCB aims for double-digit lending growth
Siam Commercial Bank plans to focus this year on retail and SME banking, overseas network expansion and upgrades to its IT systems and workforce to sustain double-digit loan growth and reduce non-performing loans (NPLs), while remaining wholeheartedly customer-centric.
SCB is still upbeat about the fundamentals of the Thai economy, especially consumption, president Kannikar Chalitaporn said yesterday.
It sees gross domestic product expanding about 4.6 per cent this year. Loan demand will be driven by consumers rather than corporations.
Based on the GDP forecast and expected overall loan growth of 10.7 per cent, SCB should grow 12-15 per cent in 2013, supported by its retail business and lending to small and medium-sized enterprises.
Its loan portfolio is 42-per-cent retail, 39-per-cent wholesale and 19-per-cent SME.
The banking business today is not led by products but by customers. Each customer segment has its own requirements, so tailor-made products and services are the key to ensuring continued loan growth, Kannikar said.
SCB has set six key objectives for this year - expanding retail banking, building market share in the SME segment, extending its network in foreign markets, upgrading operating and core information-technology systems and developing highly skilled human resources.
SCB must work on improving its NPL rate from 2.13 per cent currently to below 2 per cent, she said.
SCB has consolidated NPLs of Bt36 billion, of which about Bt10 billion is from retail banking, nearly Bt10 billion from SME banking and between Bt2 billion and Bt3 billion from wholesale banking. The remaining Bt10 billion is bad assets from the past.
SCB has developed data-collection services for each business segment to help reduce doubtful debts even though new loans will be increasing.
Under its customer-centric strategy, SCB will cover the whole retail market - mass customers, affluent customers with assets under management of Bt3 million to Bt50 million, and private banking customers with AUM of more than Bt50 million.
It has invested heavily in training its sales force to ensure its cross-selling of products would not make customers unhappy, she said.
In 2013, SCB aims to increase retail AUM by 17-20 per cent from between Bt2.4 trillion and Bt2.5 trillion and loans by 15-20 per cent from Bt657 billion.
SME banking has been re-segmented by adding small businesses with annual sales below Bt50 million. Products and services have been designed to capture this segment. Of SCB's total outstanding loans of Bt290 billion to Bt293 billion, about Bt39 billion came from the small-business segment.
SCB projects new loans of Bt45 billion to ensure it stays in the top three in SME loans.
Wholesale banking is the only segment not targeted for loan growth because it wants wholesale banking to concentrate on generating fee income.
Fee income from wholesale banking will grow to 50 per cent of the total in the near future from more than 40 per cent currently, the bank anticipates. Fee income from investment banking, which is part of wholesale banking, has increased dramatically to more than Bt1 billion a year for two straight years from Bt100 million in the previous three or four years.
Corporate customers are requiring not only loans but also more services such as cash management, trade finance and transaction services to help strengthen their competitiveness.
The wholesale banking unit is aiming for new loans of Bt40 billion to Bt50 billion. It expects its total revenue to grow by 10-15 per cent and fee income by 20-25 per cent.