KTB warms to auto leasing after absence

Krungthai Bank (KTB), the country’s fourthlargest lender by assets, wants to return to the auto leasing business after cooling on the sector for years to deal with soured loans.

The brighter outlook for Thailand’s vehicle market comes from an improving economy and the lapse of the five-year lock-up period under the first-time car buyer scheme, pushing the bank to consider a return to auto leasing, said president Payong Srivanich.

The company plans to adjust its auto loan business model to be in line with the changing business environment, particularly regarding technology and consumer lifestyles, he said, though the business plan has not been finalised.

“We slowed down auto loan expansion for a while to manage the bad loan problem and adjust our internal business operations, which continue to improve,” said Mr Payong.

He said the overall banking industry saw marginal loan growth for the first four months of this year, mainly supported by consumer finance, particularly credit card and car loans. But the bank put the brakes on its auto loan business, while its credit card business is operated by its subsidiary, Krungthai Card (KTC).

KTB’s outstanding loans, under a separate portfolio, fell by 0.19% from the end of last year to 1.74 trillion baht at the end of April.

Other consumer financing including mortgage and personal loans, and small and medium-sized enterprise loans are gaining momentum, so the bank is maintaining its lending growth target in a range of 6-7% this year.

In another development, Mr Payong said that KTB has launched its new branch model at its headquarters as a pilot project.

The new paperless branch model allows consumers to make banking transactions more quickly and conveniently, he said. The bank will monitor consumer response on the new branch model before making a decision to open more outlets, said Mr Payong.

The bank will spend more time training staff for the new branch model and improving their sale skills.

Meanwhile, KTB and eight other banks, in collaboration with PTT, yesterday signed a memorandum of understanding to develop the national oil and gas conglomerate’s financial innovation system over the next two years. The system will cover insurance, financial derivatives, electronic banking, transactions and related regulations.

KTB shares closed yesterday on the SET at 17.80 baht, up 20 satang, in trade worth 1.04 billion baht.