Krungsri encouraged by recent pick-up in lending demand
July 09, 2014 00:00 By Sucheera Pinijparakarn
Krungsri Group (Bank of Ayudhya), the country's fifth-largest bank by assets, has seen a pick-up in loan demand since the second quarter of this year, but will carefully monitor the situation for a while to ensure that the upturn leads to sustainable gro
Noriaki Goto, chief executive officer of Krungsri Group, yesterday said higher credit-card spending was a clear indicator of a pick-up in consumer-lending demand, while confidence among business borrowers had recently shown an improvement as well.
However, the bank is maintaining its 2014 loan-growth target of 7-9 per cent for now, even though consumer sentiment is on a recovery path, he said.
“We are carefully monitoring confidence levels, as we are not yet assured that the pick-up in consumer confidence and lending will lead to sustainable growth,” he added.
Krungsri and the Bank of Tokyo-Mitsubishi UFJ (BTMU) recently won the bidding to lend money for long-overdue payments to rice farmers, and – when asked about the bank’s direction in regard to involvement in major public projects – Goto said it would consider on a case-by-case basis whether to participate in additional tenders held by the government.
Meanwhile, the bank in partnership with the BTMU yesterday launched the Krungsri Thai Benefit Package, a unique financial offering that combines a Krungsri Thai Savings account, debit card and credit card in an effort to become the main bank for Japanese residents in Thailand.
In the first phase, the bank will tap new Japanese expatriates in the Kingdom, said Kris Chantanotoke, executive vice president for the wealth management division at Krungsri. Around 20,000 Japanese relocate to Thailand each year.
Under the partnership with the BTMU, he said the Japanese bank would facilitate the paperwork for financial transactions for Japanese relocating to Thailand, and that those documents would be sent to Krungsri.
When those customers then approach Krungsri once they are based here, they will only be required to sign the documents in order to get a savings account, credit card and debit card for making transactions in Thailand, he explained.
“We are beginning by tapping Japanese who are newly arrived in Thailand, as we hope the convenient service will be loudly talked about among Japanese people more widely,” he said.
At present, there are around 43,000 Japanese nationals living in Thailand, said Kris, adding that Krungsri hoped to secure 6,000 new Japanese clients annually with the help of the new service.
Goto said the bank would officially launch the package on July 15, and that it would expand its coverage and new products to existing Japanese residents in Thailand early next year.
This model has already been used in the United States by Mitsubishi UFJ Financial Group, the parent company of BTMU, since it acquired a retail bank – the Union Bank of California – he added.
According to the office of the Foreign Workers Administration and Thailand’s Immigration Bureau, Japanese account for the largest number of foreigners in the Kingdom, and about 83 per cent of the 43,000 Japanese here entered the country to work.
The number of Japanese nationals living in Bangkok ranks fourth among cities around the world for Japanese expatriates.
Goto stressed, however, that Krungsri’s direction was not to serve only Japanese customers, but to provide an equal level of service to Thai corporate and retail customers as well.