More KTB SME clients seek debt rejig

A higher number of Krungthai Bank’s (KTB) small and medium-sized enterprise (SME) customers are entering the debt restructuring process this year, given the stuttering economy.

SME customers in the debt restructuring scheme account for less than 10% of the bank’s SME loan portfolio at 329 billion baht, said Werapong Suppasedsak, senior executive vice-president of the business centre group.

A sluggish economy with lower exports is the key risk factor hurting the debt repayment capability of SME operators, he said.

“The bank’s policy to proactively help SME clients and maintain asset quality in the business segment has also contributed to the rising number of SMEs restructuring debt,” said Mr Werapong.

SME customers entering into debtrestructuring schemes receive different conditions, including interest rate cuts, loan rescheduling and grace periods for both interest and principal debt.

Through the debt-restructuring scheme, KTB can contain non-performing loans (NPLs).

Mr Werapong said the bank slashed the 2019 SME loan growth target to below 3% from above 4% previously because of the gloomy economy.

The cut is in line with the bank’s downgrade of economic growth to 2.7%.

Midsized and large SMEs, however, recorded positive loan growth for the first nine months of the year, while small SME loans contracted.

As of September, the bank’s overall SME loans outstanding totalled 329 billion baht, down 4.4% from the end of last year.

Midsized SMEs are defined as those with credit lines of 20-100 million baht and large SMEs as those with credit lines above 100 million.

KTB, the country’s fourth largest lender by assets, in collaboration with the state-owned Thai Credit Guarantee Corporation, is offering special loan packages to SMEs with interest rates starting from 4% per year.

Under the loan scheme, the bank also provides other privileges such as fee waivers, higher credit lines and longer loan periods to ease the burden of SMEs amid the sluggish economy.

The bank has prepared a total credit line of 50 billion baht for the loan scheme.

KTB shares closed yesterday on the Stock Exchange of Thailand at 16.50 baht, down 40 satang, in trade worth 975 million baht.