CIMBT projecting no 2018 personal loan growth

CIMB Thai Bank (CIMBT) expects no personal loan growth this year, cramped by the Bank of Thailand’s tightened personal loan regulations for those earning less than 30,000 baht a month.

The bank shifted its focus for personal loan products to upper-income clients with minimum earnings of 30,000 baht to control asset quality, but their loan demand was weak, leading to no growth, said Adisorn Sermchaiwong, senior executive vice-president.

The bank extended new personal loans worth 4 billion baht during the first half, while its full-year target is 9 billion baht. The personal loan portfolio at the end of June was unchanged from 20 billion baht at the end of 2017.

“Personal loan clients with monthly income of at least 30,000 baht make up 85% of our loan product customers,” he said.

The Bank of Thailand has limited personal loan borrowers who earn less than 30,000 baht a month from being granted more than 1.5 times monthly income per creditor and limited to three personal loan creditors. The central bank tightened controls on unsecured loans to put a lid on household debt and rising bad loans. That measure has been enforced since Sept 2017.

But the tougher regulations have improved personal loan quality, he said.

Despite no personal loan growth, CIMBT aims to achieve retail loan growth of 10% this year after recording 5-6% growth for the first half, said Mr Adisorn.

Mortgages, used car and motorcycle loans contributed to the bank’s retail loan growth, he said.

The bank’s new housing loans were robust in the first half and outstanding mortgages rose by 3% from the end of last year to 70 billion baht.

CIMBT targets new mortgage growth of 18 billion baht for 2018.

Meanwhile, CIMBT yesterday introduced a new deposits product, the duo baht-dollar currency deposit package, with an interest rate of 2% per year. The product is only available to CIMB Preferred customers with minimum assets under management of 1 million baht.

Depositors are required to open both Thai-baht and US-dollar deposits accounts with a minimum of 500,000 baht per account.

The special deposit package is available until year-end, and the bank aims for 1 billion baht in deposits for the new product, he said.

CIMBT shares closed yesterday on the Stock exchange of Thailand at 88 satang, unchanged, in trade worth 757,000 baht.