SCBT eyes fee income over loan growth
Standard Chartered Bank (Thai) (SCBT) will de-emphasise loan growth as it wants to concentrate on those products that can help strengthen cross-selling and fee income.
"To carry on with lending while still maintaining profit growth, we will focus not on high-risk products, but offer products such as FX and cash management to customers who require loans," Lyn Kok, president and CEO, said yesterday.
Even though the bank last year enjoyed high loan growth of 13 per cent to Bt105.72 billion and was upbeat about doing business in Thailand, the bank should show responsible lending amid the worries over ballooning household debt, she said.
Higher consumption led to high borrowing, so all banks should act prudently by giving loans to consumers who have the ability to pay their debts.
The bank's total portfolio of Bt105.72 billion is split evenly between retail and wholesale. In consumer banking, unsecured loans were Bt29.30 billion.
The bank will not target loan growth because growth means the acceleration of borrowing, while Basel III has rules for the capital ratio. If the bank extends massive loans, the provisions that will be required will be higher than normal.
Last year, the bank's net profit rose by 9 per cent to Bt3.25 billion and total income by 6 per cent to Bt11.31 billion.
The important target for the bank in Thailand is profit growth. It must beat GDP growth and be in the double digits.
Non-interest income is now only one-third of total income. The bank will drive non-interest income to be higher than interest income.
Thanks to Standard Chartered Bank's footprint in all 10 Asean countries, SCBT expects to help support Thai customers in raising funds to expand in the region.
"Transaction banking is a strategic solution in cross-border cash management. Last year we closed more big deals with Thai conglomerates such as PTT Polymer Marketing," she said.
SCBT is among the three foreign banks that helped Thai Beverage with bonds as a financial instrument to buy Fraser and Neave. The ThaiBev deal lifted SCBT to the No 3 spot in the league table for bonds in Thailand.