KBank upbeat on lending

Kasikornbank

(KBank) is bullish on its retail banking business, setting an aggressive loan growth target of 9-11% next year.

The improvement of its digital database system and stronger demand in retail loans will facilitate business expansion next year, said co-president Predee Daochai.

KBank, the country’s second-largest lender by assets, aims for total loan growth of 4-6% in 2020, compared with 5-7% growth this year. Corporate loans are expected to expand 2-4%, SME business loans 1-3% and retail loans 9-11%.

“The target of 100 billion baht in digital loans next year is the main contributor to retail loan growth,” Mr Predee said.

The bank aims for 20 billion baht in digital loans this year.

KBank’s data-driven strategy under a partnership model with international digital platforms will be the key factor facilitating digital loan growth and retail banking business.

KBank is the country’s largest mobile banking service provider, with 11.4 million users of its K-Plus app.

Mr Predee said that while corporate loans are expected to improve next year, underpinned by the government’s infrastructure investments, large companies have other alternatives for funds mobilisation.

The bond market is expected to be a popular funding source for large corporations, he said.

Given large corporate firms’ superior financial position and business operations relative to smaller operators, these factors could broaden fund-raising options for them.

Apart from the digital platform, the banking agent channel will support retail banking expansion in 2020.

The bank’s financial transactions made through banking agents have continued to increase, so the bank’s brick-and-mortar branches will gradually decline.

But the bank will further monitor transaction growth via the digital platform and banking agents before deciding to shutter any physical networks.

About 600 branches would be a suitable number relative to the economy’s size and able to serve the bank’s customer base, Mr Predee said.

According to Bank of Thailand data, KBank had 896 physical branches nationwide at the end of September, down from 970 at the end of last year.

KBANK shares closed yesterday on the Stock Exchange of Thailand at 152.50 baht, up 1.50 baht, in trade worth 1.42 billion baht.